What is Electronic Check Conversion?

Suppose you are at a store making a purchase and decide to pay by check. The clerk asks you for a check that is completely filled out, partially filled out, or even blank. The clerk then runs the check through a machine and hands the voided check back to you with your receipt.

What just happened? Did you pay by check? Why did the clerk return the check to you?

The answer is you just experienced Electronic Check Conversion.

In the electronic check conversion process, your check is used as a source of information. The check number, your account number, and the number that identifies Stillman Bank as your financial institution are used to make a one-time electronic payment from your account—an electronic fund transfer. The check itself is not the method of payment.

Federal laws (the Electronic Fund Transfer Act and the Federal Reserve Board’s Regulation E) require merchants to provide notice before using your check to make an electronic payment from your account. Notice may be provided in a variety of ways, including a sign posted at the register or written notice given to you to sign.

With electronic check conversion, your electronic transaction may be processed faster than a check. Be sure you have enough money in your account at the time you make the purchase. Keep records of your payments and check your statements to make sure the amounts charged are correct.

For recordkeeping purposes, a check should be used for electronic conversion only once. If you were to use the same check more than once and had a problem with one of the transactions, it may prove difficult for us to investigate the situation because the same check number would appear more than once on your statement.

Bills Paid by Electronic Check Conversion

Some companies apply electronic check conversion to check payments received by mail or at drop box locations. These companies are required to include a notice with your bill telling you that information from your check will be used to make an electronic payment from your account. If you receive a notice and then send the company a check, you have agreed to the electronic check conversion. Unlike when you make an electronic check conversion purchase at a store, you will not receive a receipt. Your check won’t be returned to you with your account statement because the transaction was processed as an electronic fund transfer, not as a check transaction.

If you don’t want a merchant or company to use your check for an electronic conversion, you may have to provide another form of payment (for example, cash, debit card, or credit card).

Your Rights

Each time you receive an account statement from Stillman Bank, we encourage you to review it carefully. If you see a problem with any electronic conversion transactions, contact us immediately. You have only 60 days from the date your statement was sent to you to notify us about the problem. Depending on the circumstances, it may take up to 45 days from the point of notification to complete the investigation.

You have specific consumer rights with electronic check conversion. You have the right to:

  • Notice from the merchant when you provide your check telling you that the information from the check will be used to make an electronic payment from your account;
  • Disclosure when you provide your check of any fee that the merchant will collect from your account electronically if you do not have enough money in your account to cover the transaction;
  • A receipt when you make a purchase at a store. The receipt will contain information about the transaction, including the date, amount, location, and name of the merchant;
  • This same information included in your regular account statement; and
  • An investigation by Stillman Bank if you believe any electronic fund transfer from your account is unauthorized or incorrect.

For More Information

For information on state laws that may apply to electronic check conversion, contact the state’s consumer protection agency or attorney general’s office.

If you would like more information about electronic check conversion, contact your local Stillman Retail Banker. If you believe an electronic check conversion error has occurred in relation to your Stillman Bank account, please contact us immediately.