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The mystery of one bank's electronic bill paying

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By HOWARD TROXLER, Times Columnist

© St. Petersburg Times
published April 10, 2002


Sue Farley sent me a check for $0.01, one red cent.

Well, to be more precise, she didn't.

What she did was tell her bank, Bank of America, to write the check, through its electronic bill-paying service.

I have the check right in front of me, wondering whether to cash it. "Pay ZERO AND 01/100 DOLLARS," it says.

Farley is unhappy with Bank of America for changing rules for electronic bill-paying. All customers of large banks get frustrated. But she has been dogged about saying so.

She has gone to the top, or as close as she can get, to lodge protests with Bank of America. She has traded numerous personal messages with bank executives.

As for me, she cheerfully peppers me with Web links to the latest bad news about Bank of America e-mishaps and missteps around the nation: computer glitches, uncredited deposits and network errors, enough to make you reconsider the old buried coffee can.

"We'll make the world a better place, eventually," Farley, a former math teacher, assures me. I certainly hope so.

Here is the most serious of her complaints.

Let's say that you write an old-fashioned, paper check, rip it out of your checkbook and mail it. Your bank doesn't know you've written that check until it's cashed.

That was how it used to work for electronic bill-paying too. Your account was debited when the payee got your money -- either by direct electronic transfer, or when somebody cashed the paper check mailed to them.

But the new way is that when the customer tells the bank to write a check, the money is debited at once from that customer's account.

For example, Farley told the bank to write me a check on March 6. The bank debited her account the same day. It wrote me a check dated the next day, March 7, and I got it March 11.

For five days, the money was not hers, and it was not mine either.

She is not alone in this protest. There are other bank customers out there, each stumbling around in the darkness, gnashing their teeth. I happened to hear about a certain Roland E. Kissinger of Treasure Island, who gladly sent me a copy of his own protest letter to Bank of America. (His letterhead features a charming photograph of his cat.)

"I think this borders on fraud," Kissinger says, "and they should be required to debit my account only when a payee presents a check for payment, not when I request them to send a check."

I talked to Christina Beyer, who is a helpful and pleasant Bank of America spokesperson in Tampa, and to Brad Russell, another spokesman up in North Carolina, who specializes in e-commerce.

Now that the bank is partnered with CheckFree, the bill-paying service, it has switched to a standardized process everywhere, Russell said.

Where is the money, I asked, between the time it is deducted from the customer's account, and the time a recipient gets it?

"It's not some huge ghost account where we make money off the interest," Russell said. Each transaction has to go through a clearinghouse that takes a definite amount of time.

So, where is the money during that time?

"The money is in the process."

I have to admit that I did not understand this and tried to ask my question again.

"We're probably getting past the point of where my knowledge lays, in terms of time frames," Russell said.

Both he and Beyer did point out that there are many advantages to electronic bill-paying, not the least of which is extra protection against identify theft, and the convenience of doing business within your own home.

None of this, of course, provides satisfaction to Sue Farley, nor Roland Kissinger, nor I suppose his cat, nor other customers so situated. Farley now regrets not having sent me $0.02, so she could claim that she put in her two cents' worth, but doing it now would not hold the same zing as the original gesture.

So she tells me she has exercised the only power she really has as a consumer, namely, to switch banks. Last week she sent me another check for $0.01, via SouthTrust, just to illustrate her point.

-- You can reach Howard Troxler at (727) 893-8505 or at troxler@sptimes.com.

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