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Electronic Check Recovery
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Frequently Asked Questions
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Frequently Asked Questions |
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Electronic Check Recovery
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What is RCK?
RCK refers to represented check entries or the process of resubmitting NSF
checks electronically through the ACH Network.
When was RCK approved?
NACHA (National Automated Clearinghouse Association) approved the new
banking that allows merchants to represent NSF checks electronically on
March 10, 1998. The rule became effective on September 18, 1998.
How can merchants benefit from RCK?
RCK or Electronic Check Re-presentment allows the merchant or agent to
time when the check writer's account is debited. This alone can result in
substantial increase in recovery rates.
Are there cost savings to the merchant?
Yes, since everything is electronic, there are no redeposit fees charged
to the merchant for resubmitting the checks electronically. There are no
return fees on NSF checks that are returned a second time. Additionally
there are no letters to write or phone calls to make to the check writers
attempting to recover the bad checks..
What can a merchant expect in improvement of recovery rates with
electronic check representment compared to traditional methods?
Merchants using RCK have reported increases in recovery rates from 30% to
85%.
What legal regulations and guidelines apply to RCK?
RCK entries are subject to the applicable NACHA Operating Rules, Uniform
Commercial Codes (UCC) and Regulation CC. However, RCK transactions are
originated by check and are therefore exempt from the provisions of the
Electronic Funds Transfer Act and Regulation E.
What types of checks can be represented?
Checks that indicate on the face that it was returned due to "Not
Sufficient Funds", "NSF" , "Unrecovered Funds" or comparable language.
How many times can the merchant represent an item?
A total of three (3) presentments are allowed. The RCK entry can be sent
twice if there was only one previous physical presentment, but only one
time if there were two physical presentments.
Is there a dollar limit on checks that can be recovered?
Yes, checks with a face value of $2,500 or less may be processed.
What must the merchant do to inform the customer?
The merchant must notify the consumer that their return item may be
recovered electronically if the check is returned for insufficient or
unrecovered funds. Notice should be contained on a sign at the
point-of-sale, or on the monthly billing statement for billing firms.
Is there a time limit on checks that can be represented?
Yes, each RCK entry has a time limit of 180 days from the date of the
check.
What items are not eligible for representment?
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Drafts drawn on the Treasury of the U. S., a Federal Reserve Bank or a
Federal Home Loan Bank or state or local governments.
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Postal Service Money Orders.
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Items not payable in U.S. currency.
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Items indicating on its face that it was returned for reasons other than
"Not Sufficient Funds", "NSF", "Unrecovered Funds" or comparable
language.
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Checks drawn on business accounts.
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Checks over $2,500.
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Third Party items.
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Unsigned demand drafts.
Is the merchant allowed to charge the check writer a
fee for RCK processing?
A written authorization is required from the check writer prior to the
initiation of a processing fee. A processing fee may not be added to the
amount of the RCK entry, it should be submitted as separate transaction.
After a check is determined to be NSF, who retains the paper check when
the RCK is initiated?
The Originator, the processor or the ODFI retains the paper check. Copies
may be requested from the merchant or processor via written request.
How do I, as a merchant, sign up for RCK?
You can contact NSF Resources at 800-211-6755.
Consumer Questions
Will I, the consumer, have to pay a fee to my bank for the first and/or
second representment?
Financial institutions usually share Normal NSF checks fees. Merchants
are allowed to recover a service charge as allowed by state law.
Will I receive my paper check in my monthly bank statement?
No. The check is retained by the company processing the check
electronically or returned to the merchant. Your monthly bank statement
will include payee name, "Redepcheck" in the description and the check
amount.
What if I was not notified of the RCK process?
You may sign an affidavit with your financial institution that you did not
receive notice, your account will be credited and an investigation will
take place.
Who can electronically debit my account for an NSF check?
Merchants, billers and financial institutions have the option of debiting
your account electronically for checks that have been returned. However,
they must notify you prior to receiving your check.
Can I decide how the NSF check is re-presented?
No. The merchant, biller or financial institution can represent the paper
check or represent it electronically
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