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Home >> Checks/Money Orders >> Checks You Wrote
Check Imaging the Root of the Problem
I live in Colorado and wrote a check (actually printed using MICR ink) for a magazine subscription renewal. The vendor is located in Michigan. My check was returned to the vendor stamped “Return Reason – S Refer to Maker”. Now the vendor is trying to collect a returned check fee from me. Sufficient funds were on deposit in my account to cover the check. I talked to the vendor and found out my check was “imaged”. I thought there may have been a problem with the image, so I suggested the vendor take it to their bank and ask them to look into the matter. The vendor’s bank said it wasn’t their problem and referred the vendor back to me.
The vendor sent a copy of the check to me and basically said it was my problem and I should pursue the matter with my bank. I received a copy of the check and I think I see what the problem is. When the check was imaged a “4” was inserted at the beginning of the data string, before the leading “I:” and the bank routing number, which was correct. After the second “I:” my 13 digit account number was completely left off, although it is clearly on the original check. Instead, the 4 digit check number was inserted in its place. The check amount is the last element of the data string.
Since all this is done electronically, it seems pretty clear to me that my bank was never presented (electronically) with the check for payment because the account number was incorrect. As such, their response to me would certainly be they can’t tell me what went wrong, other than the check was never presented for payment.
I’m guessing the problem lies with the organization that “imaged” my check – the vendor’s bank’s clearing house? Would that be correct? If so, is there any way to actually trace the source of the problem? It really isn’t the $10 returned check fee that bothers me. It is more the principle of the matter.
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 The "4" to the left of the bank routing number symbol is appropriate for a substitute check. That means that the image of your check was apparently reconverted back to paper form for presentment, but your account number was apparently omitted in the process. Reconversion could have been done by almost any bank on the route to your bank, including the depository bank or its agent, or an intermediary bank such as a Federal Reserve Bank. What may have happened is a presentment of the crippled substitute check, and a quick reject of the item due to the missing account number.
Tracking the route a check took can be very difficult with imaging in the picture, because endorsements aren't necessarily complete on the image or substitute check. However, your bank dropped the ball here. When it received the substitute check for payment, it should have taken the trouble to visually review the item; your account number would have appeared on the image, and the bank could have correctly paid the check based on that information.
It seems there are three problems. First, there is the matter of the crippled substitute check (missing account number in the MICR - Magnetic Ink Character Recognition - line). Whoever created the substitute check is to be blamed for that error.
Second, the failure of your bank to use the information in the image included in the substitute check to determine your account number and manually post the check to your account, and finally, there is the matter of the return code used. "Refer to Maker" suggests that there was something wrong with the transaction caused by the issuer of the check, you, in this case. That can lead the check payee to assume the problems were yours and that you should pay the payee's rubber check fee. As you said, the $10 isn't the issue in this fiasco, but if you are still concerned about the principles involved, the principal source of the problems is your bank.
Published on BankingQuestions.com 9/04/08
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