Getting Bank to Pay Check Charges

Q: I recently lost my wallet, which contained a single blank, unsigned check. I reported the loss to my bank, which advised me to close the account and reopen a new one. The following day, the wallet was found with the check intact. I immediately notified the bank; no new account was opened. However, four checks which I had written before the incident were returned to the payees with the notation that they had been stolen. Now I am facing significant returned-check fees. Am I responsible for these charges?-- A.H.J .

*

A: Robin Leonard, an author and lawyer specializing in consumer credit issues, recommends that you immediately contact the bank’s vice president for customer relations or consumer affairs and explain your story clearly and forcefully. The bank, Leonard says, should be persuaded that it acted improperly in handling your matter and should help you by reversing the returned-check fees. A representative of one of the state’s largest banks concurs with Leonard’s advice, noting that consumers are always well served to communicate directly with their financial institution when problems like this arise.

Be sure to note that you informed the bank that just a single check was potentially lost, stressing (if this is true) that you provided the number of that missing check. Also remind the bank official that you reported the check found within 24 hours of the first report, thus eliminating the need to close the account and open a new one.

Your bank account was in a state of limbo for a matter of a single day. When did those returned checks get to the bank for payment? Within that 24-hour period? Or later? If they arrived after your account had been returned to normal status, the bank can be faulted for poor internal communications and should be willing to make amends.

At the same time, you should realize that banks try hard to protect their customers from check forgeries, which unfortunately are on the rise. Even a single stolen check in the hands of a determined thief can lead to dozens of forged copies that could fool all but a highly trained professional. Banks have to walk a fine line between protecting their customers from fraud and allowing them the easiest possible access to their accounts. When the normal routine is broken, as in your case with a misplaced check, the system is taxed to its limit and unfortunately can fail. You need to understand that you are in part responsible for your situation because you did misplace the check. Taking your share of the responsibility when you talk to bank officials would be appropriate.

How to Restore Your Good Credit

Q: I filed for bankruptcy in October, 1985. It was finalized by court order in January, 1986. Since that time, I have had no credit cards because every time I apply for one, I am rejected. Now I am getting married. What can I do to clean up my credit history?-- W.E.G .

*

A: The period during which bankruptcies appear on a credit history usually expires on the 10th anniversary of the bankruptcy filing. Your credit history should be wiped clean in about 10 months. However, having a clean slate is not the same as having a good credit history.

Potential creditors want to see a history of steady credit repayment before they extend credit to a new customer. How can you show you can responsibly handle credit when no one will extend you any now? With what is known as a “secured credit card.” Although these cards look and spend like other charge cards, holders are required to deposit an amount in a bank account at least equal to the amount of their card’s credit limit.

For more information about banks offering these cards, contact Bankcard Holders of America. This nonprofit organization also publishes a report detailing the interest rates and annual fees charged by many (but not all) credit card issuers in the United States. Each pamphlet costs $4 and is available by writing Bankcard Holders of America, 524 Branch Drive, Salem, VA 24153.

Nasdaq: By Any Other Name . . .

Q: Can you give me the full name of Nasdaq?-- D.P.

*

A At one time, the initials NASDAQ stood for the National Assn. of Security Dealers’ Automated Quotation system. However, now Nasdaq is simply the name of the nation’s busiest stock exchange, which is owned and operated by the National Assn. of Securities Dealers.

At its inception in 1971, NASDAQ offered a price quotation system for over-the-counter stocks by gathering information over a network of telephone lines from the multiple market makers who are expected to post competing prices for buying and selling shares of the stocks they handle.

The system has evolved into a full-fledged stock market. It now lists 5,600 stock issues from about 4,800 public companies. But unlike the New York Stock Exchange, where a single “specialist” firm is the sole market maker for each stock listed, the Nasdaq still has multiple market makers for each listed stock, in the hope of generating competing prices.

However, in October the Justice Department opened an antitrust investigation into Nasdaq’s operations, looking into allegations of price fixing and other illegal practices that might rig Nasdaq trading against small investors in favor of large, institutional traders. The investigation is still in a preliminary phase. The NASD has vigorously denied the existence of collusion in its operations. Last month, the market proposed new rules designed to give small investors a better chance to buy stock shares at more competitive prices.

*

Carla Lazzareschi cannot answer mail individually but will respond in this column to financial questions of general interest. Please do not telephone. Write to Money Talk, Business Section, Los Angeles Times, Times Mirror Square, Los Angeles, CA 90053.