Deluxe Corp. has added a “resource center” to its Web site to prevent consumer confusion about a check conversion rule that will take effect today.
Banks and vendors are concerned that the rule, which lets banks convert some business checks into automated clearing house transactions, will create headaches for accountants.
Luann Widener, the president of Deluxe’s financial services division, which prints checks under contracts with banks, said the center is a service to banks and their customers. It includes information about the new rules, opening and managing checking accounts, check security, and fraud prevention.
“The Deluxe Check Resource Center is a comprehensive resource designed to help financial institutions, small businesses, and retailers understand the implications of recent rule changes and effectively manage the transition,” Ms. Widener said in a press release.
Deluxe said it also is preparing for a rule, scheduled to take effect in March, that will authorize retail stores and other businesses to convert paper checks into ACH payments in their back offices.
Business checks for less than $25,000 that are the same size as consumer checks and lack a set of numbers known as the “auxiliary on-us field” in the magnetic ink recognition line are eligible for conversion. Businesses have the right to opt out of conversion.
The rule, which Nacha, the electronic payments association, approved in November, is an update to the accounts receivable conversion format, which authorizes lockbox operators to convert consumer checks.
Michael Herd, a spokesman for the Herndon, Va., trade group, said banks need to be vigilant about staff training and education.
“We’ve come a long way in how we go about doing this since the ARC rule took effect,” Mr. Herd said. Though the adoption generally was smooth, “when the implementation was not done well, there were pockets where customers were surprised by it, and didn’t like it.”
Mark E. Budnitz, a professor at Georgia State University College of Law in Atlanta, said companies that convert checks must be cautious as more items become eligible for conversion in different ways.
“It may require some adaptation in their procedures for making sure payments are being made as authorized,” Prof. Budnitz said. “It can affect a lot more people a lot faster if something goes wrong.”
