I’ve learned something in the last few months about how banks really cash checks. Maybe I’m the last person to know about this but what I’ve found through first hand experience isn’t very reassuring when it comes to mistakes. I know about Check-21 which does away with paper check processing but what I’ve discovered is different.

Awhile back I mistakenly sent checks to the wrong vendors. I expected a phone call or some nasty-gram about missing a payment. Instead, each vendor successfully cashed the check regardless of the payee or anticipated payment.

• My mobile carrier cashed my $409 car payment but the mobile balance was $172
• My auto financier cashed my $172 moible phone check but the loan balance was $409

A customer service rep at the mobile carrier told me the checks are batch processed and not even looked at. This means I could write “Mickey Mouse” as the payee and it would go through. A bank rep told me the same thing.

Last week my insurance carrier cashed a check a full week before the date written on it. My bank told me the dates aren’t looked at and cashed whenever the vendor attempts to do so.

So why bother writing the correct payee, date, or my account number in the “memo” field if no one is looking? Doesn’t this invite fraud? It certainly invites problems if you make a mistake in what you write on the check.

Fortunately, paying a bill electronically (i.e.: on-line through your bank or Quicken) will ensure it gets cashed on the date you indicate because it’s EFT. I guess the days of kiting a check are over.

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• Calif mobile phone ban - it’s all about the revenue
• LA real estate exodus?

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