Check Retrieval Plans May Help Banks the Most
From the beginning, consumers were suspicious when banks offered to keep canceled checks “safe” for them. The way it was promoted was terrible: Many banks put consumers on the program automatically unless they wrote asking not to be included (the old book-club method of forcing sales), and most touted as a new “service” what was actually a cut in service, sometimes accompanied by a telltale discount on the customer’s fees.
There also seemed to be some hassle involved in getting photocopies, when needed, of those “safekept” checks. At best, banks take several days to fill such requests, and, at worst, people may receive not just their own but other people’s checks. Nor did the retrieval sound easy. “I wrote that I didn’t want the service,” says one consumer, “but was put on the program ‘by mistake,’ and when I asked for all the checks they’d kept, my bank said they couldn’t send that many; I had to pick out the few I really needed.”
Needle and Haytstack
Actually, the system works wondrously, if slowly--a computerized version of picking a needle out of a haystack, which may be why some banks don’t even offer it to business accounts, which may need the information sooner. It generally takes place far from the branch, in dark of night, in unmarked buildings whose accouterments are an odd combination of high tech and low tech, automatic processing and crude bulk storage.
Take, for example, Bank of America’s Southern California data center in Los Angeles--one of two B of A centers which, statewide, process up to 15 million checks a day--all of the checks deposited that day in the bank’s branches, as well as all of the B of A checks coming in from other banks for payment. Security is tight--guard gates, locked rooms--partly, says Frank Di Fatta, vice president-customer service at the southern center, “because checks contain customer information--names, account numbers, signatures” that could be abused.
Checks sent to B of A for payment from another bank have already been “encoded” with a “microline” indicating their home bank, branch and account number so the check can be automatically processed for routing back to the paying bank. The checks deposited that day at B of A branches are similarly encoded here--first step on their trip home for payment. Then all the encoded checks are fed, at the rate of 100,000 an hour per machine, to big processors that endorse, film and sort every item.
First, it stamps on an item sequence number--the order in which they pass through the machine--then a number identifying the center and, a quarter of a second later, B of A’s endorsement.
Reading and Sorting
Then it takes their picture, back and front, and the film is developed overnight and put on microfilm cartridges--some 200 a day--with about 40,000 items on each.
Finally, the machine reads the little microlines and sorts everything into different pockets--some for other banks, some for B of A, with B of A checks further sorted (thanks to the microline coding) according to the monthly statement “cycle” date and whether the canceled check is to be “truncated,” i.e., safekept.
Next comes some low-tech stuff. Paper checks are bunched in cardboard flats and stored in stacked wire baskets suspended from movable tracks like clothes at a dry cleaner. The checks to be returned are held until the end of their monthly cycle. The safekept checks linger on under their sentence of truncation for six months, because “when people first sign up for check safekeeping,” says Jim Wilke, the center’s manager of bookkeeping services, “we make a pledge that if they’re not satisfied in the first 90 days, we’ll give them back the physical checks.” Only later are they shipped off in locked boxes to be made into unrecognizable, usable pulp.
Retrieval of the information involves more human hands and is not always requested by those customers on check safekeeping; indeed, Wilke says, “most requests come in the first 30 to 35 days, before people have their statements back.” If a customer wants to know only whether a check was cashed, his branch can call up the account “history” on a computer terminal and read off the “posting” date, if any yet, and amount paid. But if the customer wants more--the payee’s name perhaps--someone must look at the check itself.
In this case, if the check did indeed come back, it’s on the microfilm cartridges stored at the data center--the past 30 days on high-tech quick-retrieval carrousels, the past year in another room, and the prior seven years (B of A promises to keep checks eight years) in the “archives”--another low-tech, loft-like room filled with wire shelves and flats of microfilm.
The branch checks the account history, notes the check’s item sequence number, and asks a data center employee to key the number into a computer terminal, which calls up the cartridge number, its storage location and even the relative location of the check on the film. The clerk can then put the cartridge into a microfilm reader, roll to that particular number and either look at or photocopy the checks pictured on the screen--ignoring or cutting away the unrelated checks above and below the one requested.
Given the computerized retrieval, B of A’s data center can take its 6,000 daily requests for photocopies, and “turn them around in 48 hours to five days,” says tracing manager Jane Lynch, “depending on the item’s age.” “The hardest part,” Wilke says, “is getting a good copy”--an achievement dependent on the quality of the film, the lighting, the camera, the development and the care taken with the final photocopy. Human error is the biggest problem, although there are also notations on checks so faint, says Di Fatta, that they “can be read off the film but not reproduced.”
All of this technology has its costs, of course, though they’re not easy to follow. Some banks now charge customers $1 or so a month to send checks back.
Check truncation, or safekeeping, for which customers once received fee discounts, is usually free, because it saves banks money on postage and handling. But the free photocopies that the banks promised may cost $1 to $1.50 apiece if a customer requests too many. Banks even warn that they may start charging for not returning checks--the ultimate wonder in a high-tech system that somehow ends in charging as much for truncated service as for expanded service.
