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Home >> Checks/Money Orders >> Checks You Received
Bank Reversed Direct Deposit by Fax
My bank got a request for reversal of a direct deposit by FAX, not EFT, thirty-eight days after my final paycheck was deposited, and sent the funds back. There was no notification by employer, reversing bank or my bank. What FDIC, banking laws or regulations were violated? The company has paid part, but not all of my original final paycheck after multiple letters and calls. No reason was stated except company errors.
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 It appears that your employer believed there was an error in your final paycheck. This is a matter between you and your former employer. If your employer had discovered the alleged error within a day or two of the original credit to your account, it would have been acceptable for him to submit a reversing entry within five days of the original credit (if the direct deposit amount had been incorrect), or if the employer paid you by check instead. Otherwise, the rules of the automated clearing house (ACH) association don't permit a reversing entry. For your bank to respond to a faxed request is inappropriate, at best. The original direct deposit entry was final, and the bank should have refused the fax. If there was a discrepancy between the correct amount to be paid and the amount of the direct deposit, it should have been dealt with directly with you and your former employer.
Other than the ACH rules, no particular regulations were broken. However, you can and should challenge your bank on its payment based on the fax if you still have a claim. The fact that your former employer has returned some of the funds to you may eliminate any claim against the bank, however. At the end of the day, you should end up with the amount you were ultimately due.
Published on BankingQuestions.com 3/30/10
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