01 Nov Protections when bank makes a mistake

Q. I wrote a check for $125 but somehow $1,250 was deducted. I immediately went up to the bank and began the long and painful process of rectifying what is obviously (I hope) a computer scanning error. The check was processed electronically and there is no image readily available. The bank officer had to request one. Is this legal?
— Consumer

A. There was a time when payments and deposits could take what seemed like forever to clear. Now that so much is done electronically, banking transactions are much faster, but it can be frustrating when something goes wrong.

A high percentage of checks these days are converted into electronic payments which are sent through the ACH Network, said banking expert Ken Tumin of DepositAccounts.com.

He said the rules banks follow when they send and receive electronic payments are detailed in the NACHA Operating Rules and Guidelines.

In addition, Tumin said, ACH payments are governed by the federal Electronic Fund Transfer Act and Regulation E.

“These protect consumers when mistakes or fraud occurs in ACH payments,” Tumin said. “The bottom line for a consumer is if you notice a withdrawal from your bank account that you did not authorize, you are not responsible for the lost funds as long as you notify the bank of the error within 60 days of the bank sending you a statement.”

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