[net.consumers] Checks and credit cards

abc@brl-tgr.ARPA (Brint Cooper ) (05/15/84)

I often pay for retail purchases by personal check drawn on a local
branch of a well-known bank in Maryland.  Most often, I am asked for
my driver's license (with picture) and a "major credit card."  THe
reasons given for the latter have included (1) a second means of
positive identification and (2) "if your check bounces, we'll just
put the amount on your credit card.  Several questions follow:

	1. Since I haven't signed a credit card voucher, can they
charge a bounced check to, say, my VISA account and make it stick?

	2. Am I not increasing my risk of becoming a victim of credit
card fraud of some sort by permitting my account number to be written 
down all over the place when I am not even using the account?

In England, checking account olders are provided a card by their bank which
guarantees to the payee any check written by the holder for an amount
not to exceed 50 pounds sterlinlg (about $75.00).  Why are American
banks reluctant to require positive identification of their depositors
and back up our checks?  Do they have something to hide or do they turn
a profit on bounced check fees?

ix21@sdccs6.UUCP (05/16/84)

The article 2969@brl-tgr.ARPA asks if you write a check and present
your credit card as ID can the merchant charge the check against
your card if the check is uncollectable.  According to my bank the
answer is no.  A friend of mine who owns a store tried having a
stamp made for the checks he accepts.  He stamps the back of the
check with it and has the customer sign underneath; the stamp says
that the check writer authorizes his credit card to be charged if
the check is uncollectable.  He uses the stamp for shock value only
as his bank won't accept the stamp as authorization to charge the
credit card account.

David

fish@ihu1g.UUCP (Bob Fishell) (05/16/84)

(oo)
Apparently it is not necessary for a charge slip to be signed by the
cardholder in order for the transaction to go through.  I have made
several telephone orders on my Visa to a place in PA that sells recording
tape.  The guy on the phone just takes my order, makes out a charge slip,
and sends it in.  What his means is that a merchant could theoretically
make "purchases" on your credit card without your knowledge.  However,
the laws regulating credit card purchases would protect the cardholder
against such illegal transactions; remember that you don't have to pay
a disputed portion of a bill, and the burden of proof is on the issuer.
Since the date, place, and details of a transaction are recorded at the
time it's posted to your account, it would be fairly easy to determine
whether a purchase were legitimate or not.

Regarding check protection, several U.S. Banks *do* offer check overdraft
protection tied to a credit card issued at that bank.  If you overdraw
your account, they chalk it up as a "cash advance" on your credit card,
and you pay userer's interest on the money.  It's still better than having
a check bounce, though.
-- 

                               Bob Fishell
                               ihnp4!ihu1g!fish

lynnef@teklabs.UUCP (Lynne Fitzsimmons ) (05/16/84)

The item that you are referring to is a check guarantee card.  Most of the
banks out here in the Portland, OR area have them.  You have to fill out a
application similar to that of a credit card to get one.  Most banks will
guarantee checks up to $100, ours guarantees checks up to $200.  They will
pay a bad check up to that amount, but you still get charged the bad check
fee.  You ought to see if any of the banks in your area provide this service.

-- 
Lynne Fitzsimmons
UUCP:  {allegra, decvax, ihnp4, orstcs, ucbvax, zehntel, ogcvax, reed,
	uw-beaver, hplabs}!tektronix!teklabs!lynnef
CSnet: lynnef@tek	 ARPAnet: lynnef.tek@rand-relay

msc@qubix.UUCP (Mark Callow) (05/17/84)

Regarding check guarantee cards.

I too have wondered why banks here are reluctant to issue useful check
guarantee cards.  BofA, for example, has a check guarantee card which
is just about useless.  No merchant will accept it alone.  They still
require a drivers licence *or* a major credit card.  In other words
it is one of the 2 pieces of requested identification.

Even though it is useless, they are more careful about issuing them
than they are about issuing Visa or Mastercard credit cards.

I'm from England and I have a cheque guarantee card from my bank
there.  (Calm down all you IRS spies.  There's *much* less than
$1000 in it.)  The way it works is very convenient.  All you have to
do is show the card, write the card number on the back of the cheque,
and sign the cheque *in the presence of drawee* with a signature that
matches the one on the card.  If these conditions are met, the bank
guarantees to cash the cheque.  The only small drawback is that you
cannot stop payment on such cheques.

Also British banks do not charge you when they bounce your cheques.
In fact you have to have overdrawn enough to worry the Bank Manager
before they even bounce a cheque.  When they do, they send you a polite
letter asking you to rectify the situation.  They do charge interest
on the overdraft.

I can only conclude that US banks find returned check charges too
profitable.

It is interesting that British banks which operate in the US (eg Barclay's,
and Lloyd's) acquire all the bad habits of their American counterparts
including an inability to spell the word "cheque" -:).
-- 
From the TARDIS of Mark Callow
msc@qubix.UUCP,  decwrl!qubix!msc@Berkeley.ARPA
...{decvax,ucbvax,ihnp4}!decwrl!qubix!msc, ...{ittvax,amd70}!qubix!msc

"I'm a citizen of the Universe, and a gentleman to boot!"

flake@ncrcae.UUCP (Joe Flake) (05/17/84)

A clerk in a furniture store once told me their reasoning behind asking for
a credit card id when using a check.  If the check bounced, a credit card
billing was submitted with "signature on file" (yep, there it is on the
bad check!) written in on the credit card slip.  (Similar to the "phone
order" written in on telephone orders.)  If the credit card agency would
accept such an order, most people would probably just pay the bill that
way rather than argue about the right or wrong of such a charge.

PS: I have a Master Card which I always use for check id.  The account was
    cancelled when the bank went to an annual fee, but they didn't request
    the card to be returned.  The card itself says it's valid, but it should
    be in the books as a bad card number.

Joe Flake, NCR Corp., W. Columbia, SC
....mcnc!ncsu!ncrcae!flake

ron@brl-vgr.ARPA (Ron Natalie <ron>) (05/18/84)

Equitable bank here used to give you a Welcome Check card with your
account.  You had to do nothing to get it.  No one seemed to think
they were any special.  Even a store with a welcome check decal in
the window was uninterested in the fact that I had one.  Colorado banks
are a different story.  You don't get a check guarantee without a
credit check and the back guarantees (really) bad check reinbursement.
Most places to have faith in these even to the point of gas stations
accepting checks (which is unheard of here in MD).

-Ron

review@drutx.UUCP (05/22/84)

[]
I don't know about other states, but Target stores in the Denver
aria don't require ANY id when writing a check. They just enter your
check number into the computer and unless the computer flags the
check, that's it! Not even a drivers license. Sure is a nice change
from Kmart. (I never did like to have my picture taken, especially
when writing a check!)

Brian Millham
AT & T Information Systems
Denver, Co.

...!drutx!review