On Monday, May 7, I deposited a $10,000 nonlocal check into my checking account. I received a hold notice at the time of deposit stating $100 would be available the next business day, forty-nine hundred would be available a week later (May 14) and the remaining five-thousand would be available on May 16.
The next day, the hundred dollars was available in my account. The following day, the one hundred dollars was taken away and a further hold was put on my account. My account is now overdrawn. Now they say the whole check is held until May 21, 2007. Can they legally do this?
First, the bank teller apparently reported that the bank would put a large-deposit hold on the $10,000 check. That hold could legitimately be used to provide you access to $100 on the day after your deposit, $4,900 on the fifth business day (one calendar week) after the deposit, and the remaining $5,000 on the 11th business day. It looks like the teller mistook the check as a local check (which would have made the last $5,000 available on the seventh business day, or May 16th).
As for the extended hold on the full check amount, you should have received a notice from the bank indicating its reason for placing that hold. They could legally place such a hold if --
your account is a new account (open for less than a month);
your account was recurring overdrawn in the past six months;
the check was one that had been previously returned unpaid (but not for endorsement or postdating); or
the bank became aware of information leading it to believe that the deposited check is uncollectible from the paying bank.
If the reason for the extended hold is the bank's belief that the deposited check is uncollectible, and the check ends up being paid, you may be entitled to a refund of any overdraft fees you incurred because you didn't receive the notice at the time you made the deposit. In this instance, if your overdraft is strictly because you relied on the belief that the first $100 would be available on May 8, you should ask for a refund of the overdraft fee.
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First, the bank teller apparently reported that the bank would put a large-deposit hold on the $10,000 check. That hold could legitimately be used to provide you access to $100 on the day after your deposit, $4,900 on the fifth business day (one calendar week) after the deposit, and the remaining $5,000 on the 11th business day. It looks like the teller mistook the check as a local check (which would have made the last $5,000 available on the seventh business day, or May 16th).