Bad 3rd party check policy & transition chaos

Janni writes:

“Hello,

I wanted to share my particular story of woe. After reading a bunch of the stories on this site, I feel rather hopeless that it will be resolved positively, but maybe sharing my story will help someone else.

I have a personal checking account and a small business checking account with WaMu. I own and operate a sole prop business, and being someone interested in doing things the proper way, I went the full route of registering my DBA and establishing a checking account for my business.

When I went to deposit a check with which a client had paid me at a WaMu ATM, for some reason, it wasn’t reading my business ATM card. As I was in a hurry, and as I’d intended to pay myself by writing myself a check from my business checking account to my personal checking account anyway, I thought it would save me a step if I endorsed the check over to myself and deposited it into my personal checking account. As long as I noted it properly in my records, no harm and no foul, right? When I was first working and didn’t have a checking account, I endorsed my checks over to my mother and she was able to deposit them and give me the money. I’m certainly no banking expert, but I didn’t see any great flaws of logic in this plan. This was on 9/15/08.

Apparently, despite my name being on both accounts (they have you register your personal name AND your DBA when you open a small business account as a sole proprietorship), they decided they could not accept the check. “3rd party check,” they wrote (which I had to look up, because I’d never seen the phrase before), and they returned it to me via postal mail.

Here’s where my major gripe comes into play: I’m signed up to receive e-mail notifications from WaMu. They’re quite good about sending notifications that a new statement is ready, and (of course) that a new NSF notice is ready. I’ve had a few of those in the past. They’ve been my fault, and I’ve sucked it up and paid them as I’m not someone who believes in wasting peoples’ TIME for problems that are mine and not theirs.

You’d *think* that they’d send out an e-mail notification to inform you that a check you’d deposited into your checking account (and upon which, presumably, you were thusly depending for funds) was being returned, no matter what the reason. Pretty important information, right?

They never sent such a notification. I use their online banking service regularly, but I definitely don’t check my account every day. I wasn’t aware that I needed to. I’m willing to bet that most people (apart from people for whom banking is a profession and/or obsession in some way) probably don’t. If, like me, you don’t check it every day, maybe you might want to start—particularly if you’re a WaMu customer.

So here I am, going about my business, using my debit card to pay for things (I don’t like to carry large amounts of cash on me, and I also don’t like to use credit unless I have to). And paying bills electronically and via check. All the while, blissfully unaware that the money I *thought* was in my account to cover all these things wasn’t in it at all!

I didn’t receive my returned check in the mail, or know that anything was wrong, until nearly two weeks later.

So, of course, I totted up a bunch of NSF fees. I think we’re at either number 6 or number 7. I’m too angry to log in right now and check.

I’m more than willing to accept the consequences of my mistakes—when they’re *my mistakes*. Maybe I should have known about their “3rd party check” policy. But it seems awfully shady that they couldn’t be bothered with notifying me (and I’ve been a customer of theirs for at least 3 or 4 years now) that a check I’d deposited was being returned. In fact, if one were supremely cynical, it might almost look as though they were hoping I’d rack up a bunch of NSF fees that they could pocket.

I attempted to resolve this by telephone. Over an hour later and full of disgust, I gave up. I then sent an e-mail via their secure system. I was informed that they take banking errors very seriously, and after a thorough review of my complaint, they could find no such error, and could not reverse any of the fees. This response and “thorough review” came less than an hour after I submitted my complaint via e-mail. Even assuming someone actually sits there and reviews each e-mail as soon as it comes in (an idea which is doubtful, at best), I sincerely doubt they would have come to that conclusion so quickly. More likely is that it was an arbitrary response. More cynically, of *course* a gigantic behemoth of an organization isn’t going to find an error within itself when it’s left in charge of policing itself!

I responded to this e-mail and politely but firmly stated that my problem was less with their returning the check, and more with the fact that they didn’t bother to inform me that they were doing so—almost as though they wanted to do it as shadily as possible in order to slide in some nice fees for themselves. I double-checked the notifications they’d sent out, just to be sure it wasn’t a problem on the end of my e-mail (I’d been pretty sure it wasn’t). Indeed, no such notice was ever sent.

I have no idea if I’ll get a response. While mentally, of course I was cursing a blue streak, it usually elicits greater levels of cooperation if I at least try to be civil.

Any advice would be greatly appreciated. The people at my local branch, while friendly, seem a bit helpless.

Janni”

(My response)

Hi Janni,

Apparently you are not the only one to have trouble with 3rd party checks and WaMu; they don’t appear to accept them at all. I was unable to find information with Google or on the Chase website on their policy for 3rd party checks, so I don’t know how this might change in the future.

In the future, the best way might be to cash the check at the bank where it was issued, and then deposit cash.

In my personal checking account, I get around the trouble with overdrafts by having a credit line tied to my checking account; whenever a check would take me past zero balance, it automatically draws from my credit line. It costs about $5 each time I do that, much less than an overdraft and the event doesn’t have negative connotations.

The best advice I can give you is to move to another bank.

I also bank at First Republic Bank, where I don’t have a credit line on the account. When we occasionally have an overdraft, they call us immediately, hold the check, and allow us to put money in the account so the check won’t bounce. It still costs us an overdraft fee but the recipient of the check won’t get a bounced check back, and no other checks will bounce if we fix the problem right then (i.e. figure out why we are short in the first place).

Peter

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