Does electronic check conversion
allow me to use the same check
more than once?

No. An electronic check conversion transac-
tion is a one-time electronic payment from
your account. It you were to use the same
check for more than one transaction and you
hhad a problem with one of the transactions,
your financial institution might have difficulty
Investigating the problem because the same
check number would appear more than once
(on your statement

Can electronic check conversion
occur if I mail a check to pay a
bill?

Yes, For example, let's assume that each
time you get your insurance bil it includes:
notice, The notice tells you that it you

‘mail a check, you authorize your insurance
company to use information from that check
tomake an electronic payment from your
account, If you then send a check, you have
agreed to electronic check conversion. Unlike
what happens when you make a purchase at
a store, however, you won't receive a receipt,
Your check won't be returned to you with your
account statement from your financial institu
tion because the transaction was processed
as an electronic fund transfer, not as a check
transaction,

For bill payments, you should take the same
precautions as you do with electronic check
conversions in stores. Be sure you have
enough money in your account when you mail
your check, keep records of your payments,
‘and check your account statements from your

financial institution to make sure the amounts
charged are correct.

What if I don’t want my check
to be used for electronic check
conversion?

you don't want your check to be used for
electronic check conversion, you may have to
provide another form of payment (for exam-
ple, cash, debit card, or credit card). Under
fadoral law, billors (such as a utility or cradit
card company) are not required to provide
you with an opportunity to opt out of elec
tronic check conversion. However, you may
try to contact billers directly at the address
they provide and ask them not to convert your
check

What if I need a record of my
check as proof of a payment I
made?

Your checking account statement will contain
information about your payment, including
the date, the check number, the name of the
Person or company you have paid, and the
‘amount of the payment. The statement is
generally accepted as proof of payment.

What if I have a question or
problem with an electronic check
conversion?

Contact your financial institution. For informa-
tion on state laws that may apply to elec-
tronic check conwersion, contact your state's
consumer protection agency or attomey
general's office.

Where can I file a complaint
about a merchant or someone
else I paid by electronic check
conversion?

Contact:

Federal Trade Commission
‘Consumer Response Center
600 Pernsyivania Ave. NW
Washington, OC 20580

877-ETC-HELP or 877-382-4257 (toll tre)
rte gov

Please also send a copy of your complaint to:

Board of Governors ofthe Federal Reserve System
Division of Consumer and Community Affairs
Washington, DC 208:

{888.851-1920 (TTY: 877-766-0533)
worn loderateserve gov

Remember...

Betore you agree to electronic check conver-
sion, you should frst ask yourself
© Doll understand that the information
from my check will be used to make an
‘electronic payment from my account?
Do! have enough money in my account
to cover the payment?
Before you leave the store, you should ask
yourself
Did | receive a receipt?
Does the amount on the receipt match
the amount of my purchase?
‘When you receive your statement from your
financial institution, you should
Make sure that the charges on your
statement match your records.
Contact your financial institution right
‘away it you notice a problem.

FRe1307

wi?

The Federal Reserve Board

Electronic
Check
Conversion



Suppose SS
you're at a

store making
a purchase and
decide to pay
by check—

at least, that's
what you believe
you're doing, But
then the clerk runs
your check through a

machine and hands the voided check
back to you with your receipt. Later,
when you get your bank statement,
that check isn't listed with your other
check transactions. Instead, you
notice an electronic debit to the store
for the amount of the transaction,

What happened? Did you pay by
check or not? Why did the clerk return
the check to you? The answer is, you
just experienced electronic check
conversion.

What is electronic check
conversion?

Electronic check conversion is a process in
‘which your check is used as a source of infor-
mation—for the chack number, your account
number, and the number that identifies your
financial institution. The information is then
Used tomake a one-time electronic pay-
‘ment from your account—an electronic fund
transfer, The check itself is not the method of
payment.

How will I know that my check
is being used for electronic check
conversion?

‘When you provide your check, you must be
siven notice that information from your check
may be used to make an electronic payment
from your account, The notice is required by
the federal law that applies to electronic fund
transfers, the Electronic Fund Transfer Act,
and by the Federal Reserve Board's Regula-
tion E

You may receive notice in different ways.

For example, a utlty or credit card company
ight put a notice in your bill stating that it
you pay by check, your check may be used
to make an electronic fund transfer from your
account.

Ifyou pay with a check at a store or other
place of business, you will receive notice in
two different ways. First, a merchant must
post a sign-typically at the register-notifying
‘you that if you pay by check, you are agree
ing to let the merchant make an electronic
fund transter from your account. Second, you

will be given a copy of the posted notice (or
a similar noice) that you can keep for your
records. This notice usually appears on your
sales receipt.

What are some of the differences
between electronic check
conversion and using my check
as payment?

Your electronic transaction may be pro-
cessed faster than a check. Be sure you
have enough money in your account at the
time you make a purchase.

18 Your financial institution will not return any
checks that are converted, even if you
normally receive your original checks or
images of those checks with your stato-
ment.

|& You have different consumer rights in an
electronic check conversion transaction
than you do when you use your check as
payment. For example, in an electronic
check conversion, you have the right to an.
investigation by your financial institution
when an error occurs.

What are my rights in electronic

check conversion transactions?

| You have the right to receive notice that if,
you provide a check as payment, nforma-
fion from the check may be used to make
an electronic payment rom your account.

1 When you provide your check, you have
the right to receive notice of any fee that
the merchant will colec om your account
electronically. For example, if you do not

have enough money in your account to
‘cover the transaction, your check may
bbe returned to the merchant for nonsut-
ficient funds (NSF), and the merchant may
charge you a foo. This fae is similar to a
bounced-check fee.

© You have the right to raceive a receipt
when you make a purchase at a store. The
‘receipt will contain information about the
transaction, including the
Date
= Amount
® Location
= Name of the merchant

© You have the right to have this same
{transaction information included as part of
the regular account statement from your
financial institution,

© You have the right to ask your financial
institution to investigate ary electronic
fund transfers from your account that you
believe are unauthorized or incorrect.

What should [ do if I have a
problem with an electronic check
conversion transaction?

Always review your regular account statement
from your financial institution. You should
immediately contact your financial insts-
tion if you see a problem. Were you charged
the wrong amount? Were you charged twice
for the same transaction? You have only 60
days (from the date your statement was sent)
totel the financial institution about a prob-
lem. Depending on the circumstances, the
financial institution may take up to 45 days
from the time you notify it to complete its
investigation.