If you've ordered anything online recently, you've probably noticed it has taken a bit longer to arrive than usual (what happened to Amazon's two-day delivery guarantee?). Many factors have contributed to this, not least the worker shortage that has affected nearly every industry in the US.
Mail delays can significantly affect people who rely on mailed checks to pay bills, including community association members. These delays can cause missed payments, late fees, and other financial consequences for the person who sent the check. Read on to learn why mailing checks may not be the best idea.
One common issue with mailed checks is that they get lost or waylaid in the postal system, resulting in significant delays. This can be frustrating for the sender and the recipient, as it can take weeks or even months (or, unbelievably, several years in some cases) for the check to be delivered. In the meantime, bills and other financial obligations may not be met, leading to late fees and other penalties. And, like most people, once you've written and mailed the check, it drops to the bottom of your priority list because you assume it will arrive at its destination on time.
Another issue with mailed checks is that they are vulnerable to fraud. According to the National Check Fraud Center, check washing takes place to the tune of $815 million every year in the US, and it's increasing at an alarming rate. A recent example of the consequences of check fraud happened in Fayetteville, NC. The county government had sent a $1.4 million check to a community college, thinking it would get there and be used for its intended purpose. However, a thief intercepted the check and was able to redeem it at a bank. The bank then had to reimburse what essentially became stolen taxpayer money. The problem has grown so severe that many local and federal authorities have formed task forces around the country, with agents from the Postal Inspection Service, US attorney's office, local police forgery units, FBI, and Secret Service.
As you can see, check and mail fraud can be difficult to detect. The best prevention is to avoid sending your personal information through the mail.
The Life of a Check Payment at CAMS
The days of checks being received at a place of business, completing a deposit slip, and taking it to the bank are far behind us. Companies work hard to protect customers'’ personal information, which is why checks are processed electronically directly at the receiving bank, usually with no human interaction.
When association members mail a check to CAMS, the process goes as described below.
· You drop the check in the mail. Delivery time will vary by location and can be impacted by weather, human error, and other external factors.
· The check arrives at the association's "lockbox" PO Box address (the association's bank).
· A bank employee collects the mail on weekdays and takes it to the bank's electronic processing center.
· Mail is passed through mechanical openers and electronic scanners, which scan the barcodes on the payment coupon and the scanline on your check. Any extra items in the envelope are discarded.
· If you forget to include your coupon, a bank employee may manually enter the account number and owner name if they're verifiable.
· The electronic "lock box" file is then transmitted to CAMS, and the payment is typically processed on the same day it's received at the bank.
· Suppose there's no coupon and no way for the bank to verify the payer's information easily. In that case, the payment is placed in the "exceptions file," which is transmitted to CAMS to be researched to determine if the account can be identified.
Wow, that sounds complicated! And don't forget to account for machine and human error when decoding the scanlines, barcodes, and account numbers that must be matched across the various platforms.
A Special Note About Payments Made in Your Bank's Online Portal
Paying through your bank is convenient, but did you know that many of these payments are sent to their final destination via a paper check? The money is withdrawn from your account same day, but sometimes it takes a few weeks to be received by the association. This is because banks use a middleman for processing electronic payments (e.g., Payargo, ClearedCheck Systems, etc.), and depending on the integrations between the originating bank, the middleman, and the receiving bank, the funds may be sent electronically (which may take 2-3 days), or they will mail a paper check (which may take 2-3 weeks).
When the lockbox processes these online bill payment checks, there is no coupon included, so accurate and complete account numbers and identifying information must be written on the face of the check.
How Can I Avoid Late Payments and Check Fraud?
To avoid a catastrophe like the one discussed above, it is recommended that people utilize secure online payment options whenever possible. CAMS provides many secure payment options to its clients, including credit and debit cards, E-checks, and auto-draft. These methods are generally faster, safer, and more convenient than mailing checks and can help avoid the potentially negative effects of mail delays or fraud.
What About Dropping my Payment Off at a CAMS Office?
For the protection of our customers and due to audit controls, we do not accept assessment payments in our offices. The association and its members are best served when payments are processed quickly and securely via the lockbox.
Utilize Electronic Billing and Payment Options
In addition to using online payment options, many community associations also choose online billing. This prevents the need for coupons and having to worry about your mailed check arriving safely and on time. Furthermore, these days, many community associations prefer all communication to be electronic as it will be received instantaneously and available to reference in the future if needed. And don't forget, sending an email or paying online is eco-friendly!
While mailed checks may still have their place in some situations (everyone loves to get a birthday card with a check), it is important to be aware of their potential risks and negative effects. By using online payment options, individuals and businesses can ensure that their financial transactions are secure and delivered on time.
If you'd like to learn more about utilizing online payment options and avoiding check fraud, reach out to the experts at CAMS today on our website or at 877.672.2267.
In business for over 31 years, CAMS is North and South Carolina's premier community management company. With experienced local managers in each of its nine regions, CAMS is dedicated to providing innovative solutions to the community associations it serves. Additionally, CAMS was featured on Inc. Magazine's 2022 Inc. 5000 list of the fastest-growing private companies in America. To learn more, visit www.camsmgt.com/choose-cams.
Cece Nunn - Jan 30, 2023
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