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Home >> Accounts >> Checking Accounts
My Check Was Posted Wrong -- Is This a Solution?
Here is the situation: I write a check to pay my phone bill for $100.00. On the next bill, I see I only got credit for $10.00, and after checking my bank account, I only got debited for $10. I contact the phone company to alert them that there has been an error. They tell me to simply write a replacement check for the difference. Is this good practice? Also, is there a law or regulation that requires the phone company to immediately credit my bill for the difference? After all, I wrote the check for the correct amount and expected them to give me proper credit. What if they charge me a late fee or penalty? It would be nice to defend myself with a law that says they can't do that.
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 If your check is under-encoded and the payee is a well-established, highly regulated company (as in your case), you are usually a lot better off if you quickly write a check to the payee for the difference, and ask the payee to waive any late fees or other penalties. The error is the responsibility of the depository bank (where the phone company deposited your check), and, possibly, the phone company itself. That's based on § 4-209 of the Uniform Commercial Code. If the phone company or its agent encoded the dollar amount, the phone company is liable for the error.
The trouble with the UCC provision is that, in order to get your account adjusted for the under-encoding, you would have to start with your bank, which would start an adjustment process that could take a while. In fact, your bank would probably suggest that you take care of the problem yourself by issuing a check for the difference, since that will take a lot less time than pursuing the adjustment claim. If the payee were a party that you didn't trust, you might reasonably hold out and tell them to take the error up with the bank in which they deposited the check.
Published on BankingQuestions.com 11/15/06
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