Consumers : Wiring Home for Dollars

With the deputy sheriff standing by, the “accused” trembles and says into the telephone: “Send the money right away, or there won’t be a. . . .”

Next in the television commercial, the crisp bills arrive via Western Union, and, somewhat to the deputy’s chagrin, the fine is paid, leaving the “culprit” free to depart.

With an offspring away at college, or starting a new job in a faraway city, the call is almost certain to come--hopefully without the pressure of police charges.

Your verbal response may be the traditional, “What, you’re out of money already?” But the problem still remains: how, in a matter of hours, to get real, spendable money to someone in another city.


For starters, the experts say, in today’s world of electronic banking, the chances of a financial emergency can be cut down sharply with good planning. Setting up a checking account with a cash reserve in a bank in your child’s college town is a recommended first move.

“The account provides a good teaching system on the use of money--and a control system--for the responsible young student,” said John Popovich, vice president and director of public affairs, First Interstate Bank. “That is the safest and most instructive method.”

Then, Popovich said, parents can send a monthly check for deposit to the account.

If you mail checks to your son or daughter, for deposit in an out-of-town savings or checking account, a new federal law that took effect Sept. 1 limits the length of time the bank can hold a check before it has to produce the cash.


Under the new law, a bank can put no longer than a seven-day hold on an out-of-town check. Consumer groups had charged that banks sometimes held checks from another state for up to three weeks, collecting interest on the money for the full period while depriving the depositor of the use of the cash. The banks in turn had pointed out the need to protect themselves from heavy losses from bogus checks.

If you forget to mail the check on time, don’t panic yet. If the young person away from home for the first time has managed to set up a bank account--checking or savings--then money can be wired into that account. When the frantic call comes to announce that the check didn’t arrive and the last dollar is about to be spent, an electronic wire transfer will get the money there in 24 hours.

The fee is fairly expensive--Wells Fargo Bank charges $18 to wire money, in any amount, to another bank. And the bank at the other end also is likely to charge a fee, perhaps $10 or so, to the recipient.

“The important thing is there has to be some sort of account (for the money to go into),” said Kim Kellogg, Wells Fargo vice president and general manager of the bank’s San Francisco-based news bureau. “You have to have a financial lifeline. To leave them totally floating out there is a mistake.”

Guarding against a financial crisis, which could develop into hunger pangs as well as emotional distress, “takes a lot of planning on the parents’ part and on the student’s part,” Kellogg said.

If the son or daughter hasn’t had time to establish a bank account away from home, there are other ways to obtain emergency money. Cash advances of varying amounts can be obtained, through varying procedures, on VISA and MasterCard accounts and through American Express.

And with banking networks providing reciprocal use of automatic teller machines, students can use an ATM card from their parents’ bank account to get cash from another bank in another state. A First Interstate card, for example, can be used in a Manufacturers Hanover ATM in New York to draw money from your California account. Another example: Wells Fargo is in an ATM network with Champaign Federal Savings & Loan, Champaign, Ill. Thus a student at the University of Illinois, Champaign-Urbana, can use a Wells Fargo ATM card to obtain cash from his or her parents’ account in their California bank, Kellogg said.

“The question is, how responsible is the student?” Kellogg pointed out that someone with untamed spending habits could quickly empty the parental account.


Unforeseen Events

But with all of the wonders that modern electronics can perform in moving money around the world instantaneously, and with all the conscientious preparation helpful parents can provide, there may be no escaping a cash-flow crisis.

Just when you think it’s clear sailing for the relocated young person, a mugger (or merely a thief at the dorm) makes off with billfold or purse. Gone: all the cash. Gone: the credit card with mother as a co-signer, and the ATM card as well.

“There are circumstances in life when the unexpected happens, and suddenly we’re in a money crunch,” said Donn Dutcher, News Bureau manager for the Western Union Corp., Upper Saddle River, N.J. “You don’t start out in the morning with the idea that you’re going to get mugged or arrested.”

For fast movement of cash, Western Union provides its well-advertised solution. A credit-card transfer, once identification is verified, takes only 15 minutes. Sending $100, charged on the credit card, costs $18; for $200, the fee is $27. The fee is proportionately smaller for larger amounts.

Despite the crisp bills shown in the TV ad, however, the Western Union office at the receiving end won’t necessarily come up with cash. Instead, if there isn’t sufficient cash on hand, Western Union may hand out a check or money order. That may mean a hangup at the bank, and still no cash.

“A high percentage of the time, we are able to pay cash,” Dutcher said. “It depends on the amount the agent is able to keep in the till.”

If the young person really is arrested, and has used that only phone call for an appeal for “money right away,” chances are the needed sum will be supplied in the form of a money order, made out most likely to the clerk of the court. For another fee, usually about $10, the agent will deliver the money order--since the accused may not be permitted to stroll down the street to the nearest Western Union office.


Of course, Dutcher said, the young person might merely be stranded, not arrested. For students, Ft. Lauderdale at spring break is a prime location for becoming stranded. “Every year, they (the guys) are out chasing girls, and suddenly they find they’re without funds,” Dutcher said.

Dutcher recalls the time his own son had a narrow escape on a Saturday night trip into Manhattan with his buddies. Muggers took their wallets--but one of the youths had hidden some folding money in his shoe, and there was enough cash for all to get the bus back to New Jersey.

No substitute for good planning.