Check Collection Questions & Answers

Some Commonly Asked Questions

What happens if one of our good customers bounces a check?
Call us toll-free and tell us to drop the fee. Your
customer will not be charged a fee.

How does the Daily Fraud Alert work?

Each day our computer scans our database for people who
have written three bad checks in the last 30 days. It then sends an e-mail or
fax warning to any customer who has taken a check from that check writer.

Will your service work in my state?
We can electronically debit accounts in all 50 states for
checks written on any bank in the Federal Reserve System

Do I need to use check verification or check guarantee?
From a cost/benefit stand point, only about 15% of
businesses actually save money this way. After you use our free service for
three months, we will analyze your account and tell you if check verification or check guarantee will help.

Is This Type of Service Secure?
Absolutely, our business processes and service is regularly audited and regulated by the same agencies that audit and regulate the entire banking industry across the country.

This Sounds To Good To Be True. Is it Legal?

Yes it is Legal. Here is a press release during the time that Legislation was passed to allow electronic check collection.

In March of 1998 the National Automated Clearing House Association (NACH) approved electronic check collection of insufficient funds (NSF). Under the NACHA ruling, checks returned for insufficient funds can be legally be re-presented electronically as well as through traditional clearinghouses. Following is the first press release to announce approval of this rule.

NEWS RELEASE

FOR IMMEDIATE RELEASE CONTACT:
Michael Herd
703/834-2379

Returned Checks Can Now Be Collected Electronically, NACHA Announces

Seattle, WA, March 10, 1998- The National Automated Clearing House
Association (NACHA) announced today that its Board of Directors has approved a
"rule" for the electronic collection of checks returned for insufficient funds
(NSF). Checks that have been returned unpaid for NSF can now be collected through the
Automated Clearing House (ACH) Network, the network that allows financial institutions to
exchange payments on behalf of business customers and consumers. NACHA announced the new
rule at its PAYMENTS 98 conference in Seattle.

Keith Theisen, Vice President of
Norwest Bank, led the NACHA Rules Work Group that developed the rule. He said, "The
collection of returned checks through the ACH Network can bring substantial cost and time
savings to businesses, consumers and financial institutions. Respondents to the group's
request for comments estimate that costs associated with representing an NSF check can be
reduced by up to 50 cents per check for businesses, and one dollar per check for financial
institutions. Lower costs also make the collection of small-value checks more
cost-effective." In addition, NACHA projects that the rate of successful collection
could increase by 25 to 50 percent.

Consumers will benefit from the new
provision, too. Hal Piotrowski, Vice President of Charter One Bank and the Chairman of
NACHA, said, "Use of the new ACH check collection transaction will result in quicker
removal of negative information from check verification databases, which many merchants
use to screen out bad check writers. This means that consumers will be able to write
checks again sooner."

Currently, returned checks that are to
be "re-presented" must be physically sent through the check clearing system in
order to be collected. The new NACHA rule allows this representment to take place over the
ACH Network.

The new rule creates a new Standard
Entry Class Code - RCK (for Represented Check Entry) - under NACHA's Operating Rules for
the ACH Network. The RCK code provides a method to initiate an ACH debit transaction in
place of a paper check, after the original paper check is returned for insufficient funds.
The RCK rule becomes effective September 17, 1999.

Steve Shutze, Senior Vice President of
NationsBank said, "The new Represented Check Entry transaction was created in
response to the needs of businesses that need faster and more successful collection of
returned checks."

Theisen added, "In preparing this
rule, NACHA reviewed and responded to 126 comments from financial institutions,
businesses, and other stakeholders in the ACH Network."

The NACHA Board also approved an
interim rule, effective September 18, 1998 through September 16, 1999, to allow ACH
participants to use the existing Preauthorized Payment and Deposit (PPD) Standard Entry
Class Code to initiate these transactions.

The RCK rule requires business who plan
to collect returned checks electronically to notify check-writers, at the point of sale or
on monthly bills, in a manner similar to notices currently required for collection fees.

About the National Automated Clearing House Association (NACHA)

NACHA, located in Herndon,
Virginia, represents more than 13,000 financial institutions through its 35 regional ACH
association, six councils and corporate Affiliate Membership program. A leader in the
payments industry, NACHA develops operating rules for the Automated Clearing House (ACH)
Network and for emerging electronic payment solutions in the areas of Internet commerce,
bill payment and presentment, financial EDI, cross-border transactions, electronic checks,
and electronic benefits transfer. NACHA produces marketing collateral and technical
publications, and provides extensive education services, including major conferences and
seminars.