By KIRSTEN GUDMUNDSEN
Most BYU students have done it–written a check for under ten dollars only to find that the check bounced. This can be a humiliating experience for students as well as costly, but it is also a time-consuming problem for Provo businesses and banks.
Banks deal with overdrafts in similar ways, however differences occur in the bounced check fees and in time allowances.
First Security Bank charges $19 for an overdraft, but they also allow their customers an option to protect against overdrafts.
“We have what is called a customer cash reserve. A person applies to have a customer cash reserve in their account. The customer cash reserve will always transfer up to $100 in the event of an overdraft,” said Jennifer Schumann, communications officer for First Security bank. “The money comes out of their savings account. Basically, it works live a credit card with a revolving interest of 2.5 percent.”
First Security tries to help their customers in an overdraft situation.
“We like to work with our customers and help them pay their bills. The final decisions are made by our branch managers,” Schumann said.
Key Bank of Provo also charges the customer $19 if the check is not paid, and $17 if the check is returned.
“Our policy is that if the bank is not at fault for the overdraft, then the customer pays the fee,” said George Babcock, customer service manager of Key Bank.
Key Bank will base their decision of how to handle overdrafts on an individual account basis.
“We look at the length of time the person has been with the bank, their average balance and the length of time they’ve been in the area,” Babcock said.
Bank One of Provo also determines the handling of overdrafts by individual accounts, said Jerri Jenkins, manager of Bank One.
Bank One also offers their customers options for protecting against overdrafts.
“Some of our customers hook their Visa cards to their accounts, which allows in transferring money. There is a minimum charge to the customer when an overdraft is covered by their Visa,” Jenkins said. “We also have the check protection card that offers a line of credit of $250 for automatic transfers. There is still a charge per check of $20.”
Local businesses have been dealing with bounced checks as well and each business deals with the problem in various ways.
Kent’s Food Store, located by Heritage Halls, used to spend hours dealing with bounced checks.
“(Bounced checks) has been such a problem that I used to spend eight to ten hours a week just on bounced checks,” said Manager Jeff Johansen. “I used to call the individual and give them two weeks to come in and pay the check off, but now the check goes directly to a collection agency.”
Johansen still sees around five to 15 bounced checks a week at the grocery store.
“It’s still a big problem. I see somebody write a check for under ten dollars and it bounces. That $10 or less check instantly costs them $30 because of the bank charge and the collection agency charge,” he said. “Now that $10 check costs them $40,” he said.
Johansen is frustrated with the problem and does not like seeing students pay more money.
“I just don’t see the reasoning behind writing a check that you know is not going to clear. I hate seeing students pay for those extra charges when its really not necessary,” he said.
Albertson’s grocery store also has problems with bounced checks.
“It’s definitely a problem for us. We call (the person who bounced the check) every day or every other day to get them to come in and rectify the problem. After a month, if the person still hasn’t paid, we give it to a collection agency,” said Manager Marcia Price.
Of those called about bounced checks, 90 percent respond to the phone calls, Price said.
“The other 10 percent are usually checks we know are bad checks or stolen checks. Also that 10 percent is due to the cashier’s failure to properly check identification and addresses,” she said.
Another grocery store, Food-4-Less, also deals with the problem of bounced checks.
“It is a big problem. We have thousands of dollars every year in bounced checks,” said Manager Gary Hendry.
Hendry said Food-4-Less will submit the check to the bank to be redeposited only once and then the check will be turned over to the collection agency.
“The bank is a service and we use it as a courtesy for our customers, but its not mandatory,” he said.
Food-4-Less and Albertson’s managers said that bounced checks are usually local checks rather than out-of-state checks.
