TDCAA Community
Hot Check

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October 26, 2004, 09:39
Linda Watts
Hot Check
A merchant has inquired about their right to require identification, particularly telephone numbers, before accepting a check for payment. A bank in the area is telling their customers a merchant cannot require this information. Where do I go to reference the business rights? I do not know where to go to research it. Thanks for your help.
October 26, 2004, 10:11
Randal Lee
The business has a an absolute right to require any reasonible condition it wants before taking a check. Phone number, DL number, employment etc.. I am sure that they cannot require a social security number.
I try to encourage all my business's to get such info.
October 26, 2004, 13:54
I don't know, but it seems to me that if a business can refuse to accept checks entirely, then they also can put almost any conditions they want to on accepting checks, right? It's not like anyone is forced to write checks, and with all the identity theft and fraudulent check writing, it almost seem negligent NOT to get as much information as you can.
October 27, 2004, 09:40
Lisa Peterson
I believe that the business may require as much information as they choose (absent numbers that are regulated, such as SSN), HOWEVER the consumer has a legitimate concern about identity theft (especially when you think of the number of hands through which the check will pass). Remember the days when a credit card number was required to pass a check? No one would dream of requesting that now!

The consumer always has the option of a) shopping elsewhere or b) paying with cash. WHen it comes to filing on the check, the merchant has the choice of a) providing appropriate identifiers or b) eating the check.
October 27, 2004, 10:58
The time for banning paper checks is approaching. Given the amount of electronic commerce going on, there is little reason any more for paper checks.

I say ban them and lets use cash or electronic money. What would be the down side?
October 27, 2004, 13:15
Asst DA's/CA's could no longer depend upon the "float" time...
October 27, 2004, 14:41
Mark Edwards
Beginning tomorrow, there is no more "float time." Paper checks will be electronically paid almost immediately. This is in response to 9/11 when all the planes were grounded. It took the checks so long to get where they needed to be that the banking industry then caught up to modern times. But John, I still like paper checks. Call me old fashioned!
October 27, 2004, 15:33
Rick Mahler
We up here in north kind of depend on those hot check fees to eat since our county commissioners have not been exactly generous in setting our salaries. So, don't even kid about doing away with checks!!!
October 28, 2004, 11:25
Scott Brumley
Aside from choking off hot check fees (which I, too, lament), the demise of paper checks ushers into the prosecutorial realm a markedly increased reliance upon computer experts and white collar civil types, like it or not. The alternative, I suppose, is to take the politically risky approach of telling merchants that the banks and legislators have sold them out without a safety net (i.e., electronic theft prosecution is simply too expensive and complex for our underfunded offices). At the same time, although they are technologically advanced and undoubtedly speedier, I'm not fully convinced that EFTs necessarily will provide significantly greater protection against identity theft than paper checks. But change, like death, is inevitable.
October 28, 2004, 12:25
Tim Cole
Some places are requiring a fingerprint. I can't imagine anything more intrusive than that, although a guess identifying information in this day and age is easier to misuse than someone's fingerprint. See there, I answered my own question. I have not written a paper check in over a year but using a credit card is probably just as risky, especially if the merchant has the old fashioned system that prints the number right on the receipt. This comes from a prosecutor who has actually been the victim of identity theft.
October 28, 2004, 12:27
Martin Peterson
Scott: Although the new faster electronic processing of paper checks may serve to alert that an account is overdrawn much quicker, I still believe the use of a single plastic card makes it somewhat more difficult to engage in fraud. Electronic transactions are either instantly approved or disapproved and the cards are a bit more difficult to forge/produce/steal than paper checks. At least the cards will be tied to real accounts. Plus, of course, even small amounts of this type of fraud can be prosecuted as a felony. The popularity of debit cards is pretty good proof we could live without paper checks.
October 28, 2004, 13:08
P.D. Ray
Personally, I am a fan of any measures that put companies like 'instacheck' in Lubbock out of business.
October 29, 2004, 09:40
Terry Breen
If you own one or 2 rent houses, are you supposed to get a credit card merchant acct. so your renters can pay you without using a check?

If you sell your car in a private sale, or you sell your horse or a bull, or a rifle, will you have to take cash, because the powers that be have decided paper checks are too retro to use?

If you want to send a relative money across country, will you be forced to wire the funds, and pay the fee?

If you own a small business that does a few, relatively expensive transactions a mo. (e.g. drilling water wells) are you supposed to revert back to just taking cash?

Paper checks, I think, serve a real purpose. Their transaction costs are far lower than credit cards (who charge the merchant between 1--5% fee for each transaction), I can't imagine they will go away in the foreseeable future.
October 29, 2004, 13:33
Seems like the banks will eventually be the ones who decide this issue. As fewer and fewer people use paper checks, the banks will lose their incentive to support them and will someday stop offering the service. I expect that that day and the day they are willing to tell the landlord "yes, if you own two houses you can afford a computer and a paypal account," will probably show up quite near one another on your calendars.