There’s a bit of a debate going on between me and some of my mates; I always believed that you could write a check on any piece of paper, and it would still be valid; that a checkbook was just for your convienience. I seem to recall hearing that it’s legal as long as it has your account number, signature, and amount in numerals as well as written. My friends think I’m crazy, that you can only write a check from the special checkbooks you get from the bank, but I remember stories about a notorious prankster that would pay all his bills with checks written on extraordinary things, like bricks, hats and (I may have dreamt this) the side of a cow.
A few months ago one of our customers faxed us a check. They did it simply to let us know “Hey, you’re check is ready you should have it in the next few days.” Could I have just taken the faxed copy to the bank and called them up and said “Don’t worry, I already got it!”
The short answer is that one of the sources of rules about what kinds of checks you can write is the agreement you sign with the depositary bank. Most of them say something like this:
If you can get the bank to accept the faxed image of a check, you’re golden. More and more often, the actual piece of paper you hand over to the teller doesn’t get more than about 50 feet away from the teller window before it’s scanned, imaged and destroyed. (We call this “truncation” and it’s a key part of Check21 that lets us zing pictures of checks across the network rather than have to lug physical items from one bank to another.)
Notice something? We’re working with pictures of checks and strings of numbers internally, so if you bring in a good photocopy that’s scannable, and you convince the teller that it’s legit, it should process right along with no problems. The datastream that says “Cecil Adams owes Joey P fifteen bucks” is all that matters. It hits Cecil’s bank. Cecil’s bank says “Yep, Cecil has the money. We’re taking it out of their account and sending it your way.”
There are a handful of things that make a check a check. (as opposed to a coupon, a draft or a grocery list) Being a piece of paper, oddly enough, is not one of them.
In daily practice, of course, any right-minded teller is going to send you packing if you bring in something that’s not an original, and on a piece of paper, regardless of how clearly “Pay to…” is marked on it. Likewise, the newer ATMs that scan and truncate checks internally (identifiable as the ones that don’t need envelopes for deposits) will also refuse anything that’s not on paper.
Now, that doesn’t expand on what PFCU has authorized currently, or what they may decide to authorize in the future. For all I can tell from that sentence, they may have authorized the use of salmon filets. Chances are pretty good that they mean paper, though.
Well, if they’ve approved salmon for their deluxe checking program, then you may write a check on a salmon, and they’ll be contractually obligated to accept it. U.C.C. § 3-408 places the dispute squarely between you and your bank.:
That relationship, in this case, is governed by § 4-402:
The PFCU example modifies this relationship a bit, too:
Back to the basics, most checks don’t come from the banks themselves. They come from printing companies that don’t have any more legal standing than you or I do. In fact, software to print your own checks on your computer is common and perfectly acceptable. You can create one in MS Word if you want to. I don’t know what the practical limit is but you can create your own checks on a computer for sure and use fancy fonts and background pictures. Try getting stranger and stranger from there and see what the practical limit is.
No one has mentioned magnetic ink… Wasn’t/Isn’t a large part of modern checks the magnetic ink that is used which greatly aide and speed up check processing? Or am I thinking of something else entirely?
Checking law is an obscure but well developed field of law. Linked below is a classic story of a man that decided on a whim to deposit a junk mail promotional check into an ATM. It was for about $100,000 and he expected the bank to get a chuckle out of it. Instead, everything about the check was legal. The money was deposited into his account and he sent both the bank and the promotional company into a panic. Because they were so hostile and he was legally free and clear, he strung them along for a while and consulted experts on checking law. It appeared that the money was his but he eventually returned it like he always intended to.
This story is long but is still really good and an early web classic:
I should add that the story I linked above is many pages long but is also an excellent laymans tutorial on checking law and its oddities. I think you will understand it better if you read the whole story. Look for the links to the next pages because it is web old-school and goes for about ten pages.
If there’s no MICR (or it’s unreadable) the check is put into a cellophane envelope with the account info printed in MICR at the bottom.
OR, they just print the MICR onto a strip of paper and glue that onto the bottom.
(Why yes, I balance the check book for a small business)
The relevant word is “was”. Magnetic Ink was used way back when, because it was more reliable than regular OCR-type scanners. But not anymore.
Nowadays you can buy a scanner for your home PC for under a hundred dollars, including OCR software, that can reliably read any well-printed page.
So nearly all banks have converted to optical scanners rather than MICR readers. (The exceptions would be banks in tiny towns, that haven’t upgraded their equipment in the last 25 years. And even those have procedures to manually handle checks that the MICR reader can’t read.)
The MICR font is an easy one to read (especially as it only has 14 characters) for either MICR readers or optical scanners.
