TABLE 3 Availability of Bank Cards and Cost of Payday Advances Panel A: Use of Bank Credit Cards Payday Advance Customers (%) All Adults (%) Has bank cards 56.5 72.5 If yes, how many bank cards One 39.6 37.7 Two 33.5 29.3 Three 13.9 13.0 Four or more 13.0 20.1 Payment practices on bank cards Almost always pays full balance 25.1 48.8 Sometimes pays full balance 20.3 20.7 Hardly ever pays full balance 54.6 30.4 Refrained from using bank card in 60.8 na past year because credit limit would have been exceeded Panel B: Cost of Payday Advance Relative to Cost of Do Not Higher (%) Same (%) Lower (%) Know (%)
Returned check fees 43.6 27.6 22.3 6.6 Late fees on rent (mortgage) 40.8 22.0 21.6 15.7 Late fees on credit card or 33.5 29.0 24.4 13.1 other consumer debt na, not available.
(39) The extra time for ACH returns may allow for the detection and return of erroneous or fraudulent ACH payments--payments that if made by check would have to be pursued through other means and therefore would not be identified as
returned checks. Business associations commonly voice more concern about check fraud than ACH fraud because businesses often use accounts that block ACH debits from being received, avoiding any type of fraud or error.
The number and value of checks paid, the share of on-us checks, and the number and value of
returned checks for 2000 were estimated using data from the Depository Institution Check Study.
These benefits include enhanced customer service, reduced float, greater certainty of collection, and fewer
returned checks, among others.
Some of those savings come in die form of bank charges for
returned checks. Doug Cunningham, national account manager for Cashex, a systems vendor based in Atlanta, said banks in Georgia and Florida usually charge between $1 and $5 for
returned checks.
A depositary bank may agree with a paying or returning bank to accept an image or other notice in lieu of a
returned check even when the check is available for return under this part.
The 1.9 million-member SECU said it paid more than 5,900 Another Chance items over three days, totaling $916,000, waiving more than $71,000 in $12 NSF fees associated with those payments while sparing members an additional $148,000 in averted $25
returned check charges.
Chex-2-Cash threatened New with a
returned check fee, late fees and a criminal referral when she decided to end the deal.
Early notification of a
returned check may enable a retailer to cancel a shipment of goods.
To facilitate banks' compliance, the Reserve Banks implemented new
returned check services for which they had to add about 600 employees throughout 1988 and 1989 and spend more than $60 million.
He pointed out that without overdraft coverage, members could spur a detrimental chain of events due to a
returned check for a mortgage payment, auto payment or rent, for example.
Check authentication also reduces
returned check fees, which are immediately added to the retailer's bottom line.
