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Check21 and Images | 10 Tips to Prevent Identity Theft | Beware of Phishing Scams | Other Frauds and Scams | Civis Bank News

Check21 and Image

Effective October 28, 2004, under a new Federal Law known as Check21 (The Check Clearing for the 21st Century Act) a new instrument will be introduced, a substitute check A substitute is a copy of a check that you wrote and under this legislation will be regarded as the original check. The main goal of Check 21 legislation, which was passed into law in October 2003, is to improve the overall efficiency and security of the nation's payment system.

Check 21, which is the most sweeping change in check processing in decades, promises to usher in a new era of banking efficiency and service. This new efficiency will have significant benefits:

  • Checks will clear faster, making your account's balance more accurate.
  • Fraud will be reduced, because as checks clear faster, banks will be able to identify fraudulent items sooner and minimize customer inconvenience.

For more information, you may stop at one of our branches and request a Check 21 brochure.

Frequently Asked Questions

If my check is scanned, what happens to my original check?
The original paper check is removed from the check collection or return process and an electronic image of the item is transmitted in lieu of the original item. The original check is then destroyed.

Can I obtain a copy of my check and will there be a fee for the check copy?
You will be able to receive a special kind of copy of the check called a "substitute check" or image replacement document (IRD). The substitute check or IRD will be treated the same as the original check under state and federal law. There may be a fee to re-produce a copy of a substitute check, just as there may be a fee to order past copies of your monthly statements.

Will the substitute check or IRD look just like my original check?
This document will contain the scanned image of the front and back of your check along with some legal encoding to verify its authenticity.

What will happen to my original check after the imaging process?
The institution that converts your check to an electronic transaction will destroy the check.

What happens if there is an error when converting to a substitute check?

If there is an error relating to a substitute check or IRD, there is a process by which you will be able to get a re-credit for any disputed funds for 10 days (up to $2,500 for each disputed check). This will give the institution time to resolve the matter, but allow you access to your funds during that time. The consumer re-credit rights will be explained in a notice provided to existing customers and to new account customers.

How long will it take for my check to clear under the Check 21 Act?
Currently checks take an average of 1.2 days to clear. This is based on 80% of checks being cleared in one day, and the remaining 20% being cleared the second day -for instance when checks have to be transported across the country. Industry experts predict that most clearing will be one day in a post-Check 21 environment.

If my check clears faster, will I gain access to my deposits sooner?
No. The legislation does not necessarily affect the hold times placed on deposited items. However, it does mean that the actual funds will make their way through the system quicker and will reduce the time that you'll wait for checks to clear.

What if I want to get my original checks back? Can I 'opt-out' of Check 21?
The Check 21 Act mandates that banks accept substitute checks or IRDs in lieu of the original check. So individuals, or banks for that matter, can't choose not to participate.

What if I have a legal case and I need to present a paid check?
A substitute check or IRD is the legal equivalent of a check and subject to check law. It is subject to the standards outlined in the UCC (Uniform Commercial Code), part 229 of Title 12 of the Code of Federal Regulations, and other applicable state or federal law "to the extent such provision of law is not inconsistent with this Act."

Is there a way to tell which bank converted my check to a substitute check or IRD?
Banks are required to identify themselves as the "reconverting bank" (the one that created the substitute check or IRD) so as to preserve any previous bank identifications. This will either be indicated 0 n the substitute check (IRD) or may be obtained by contacting your bank.

Are there any web sites that provide more information on Check 21?

  • BAI's Check 21 Resource Center: -Bank Administration Institute (BAI)'s web site devoted to feature articles, publications, news alerts, press releases, presentations, white papers, etc., on the topic of Check 21.
  • Federal Reserve Check 21 Site: -Federal Reserve Bank's public location for Check 21 developments.
  • ECCHO: -The Electronic Check Clearing House Organization provides several Check 21 documents, including the history of the act and various regulations.

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10 Tips to Prevent Identity Theft

Identity theft and account fraud are making big headlines. They happen when someone steals personal information such as your bank account number or Social Security number and then poses as you, either cleaning out your account or running up debt in your name or both. The threat is real, and the government estimates 400,000 people are victimized by these crimes each year. Civis Bank works hard every day to ward off these threats, but maximum security is possible only with your help. Here's what you can do to stop these crimes before they happen and protect your assets and your good name:

1. Don't give out financial information such as checking and credit card numbers and especially your Social Security number on the phone unless you initiated the call and know the person or organization you're dealing with. Don't give that information to any stranger, even one claiming to be from your bank.

2. Report lost or stolen checks immediately. Civis Bank will block payment on the check numbers involved. Also, review new deliveries of checks to make sure none has been stolen in transit.

3. Store cancelled checks and new checks in a safe place.

4. Notify Civis Bank of suspicious phone inquiries such as those asking for account information to verify a statement or award a prize.

5. Guard your ATM Personal Identification Number and ATM receipts. Thieves can use them to access your accounts.

6. Don't throw away financial solicitations that arrive in your mailbox. Tear them up so thieves can't use them to assume your identity. Tear up any other financial documents such as bank statements or invoices before disposing of them.

7. Don't put outgoing mail in or on your mailbox. Drop it into a secure, official Postal Service collection box. Thieves may use your mail to steal your identity.

8. If regular bills fail to reach you, call the company to find out why. Someone may have filed a false change-of-address notice to divert your information to his or her address.

9. If your bills include suspicious items, don't ignore them. Instead, investigate immediately to head off any possible fraud before it occurs.

10. Periodically contact the major credit reporting companies to review your file and make certain the information is correct. For a small fee, you can obtain a copy of your credit report at any time. The three major credit bureaus are:

Equifax 800-685-1111
Experian 888-397-3742
TransUnion 800-916-8800

Together, you and Civis Bank can head off identity theft and account fraud before they ever happen.

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Beware of Phishing Scams

Phishers send out large numbers of e-mails to random people and hope to hit customers of the target company. The e-mails usually look official, and include the company's logo. They ask the customer to either fill in a form included in the e-mail or to go to a different Web site to fill out a form asking for information like account numbers and Social Security numbers.

Ways to help prevent Phishing - Be suspicious of any email with urgent requests for personal financial information. Always confirm such requests with your financial institution. "Phishers" often use upsetting or exciting (but false) statements in their emails to get people to react immediately. They typically ask for usernames, passwords, credit card and social security numbers. DO NOT use links in an email to get to any web page if you suspect the message might not be authentic. Call the company or log onto the website directly by typing in the web address in your browser. Avoid filling out forms in email messages that ask for personal financial information. Regularly log on to your online accounts and verify each transaction is legitimate.

If You Are a Victim of Identity Theft or "Phishing"

If you suspect that your identity has been misused to commit fraud take immediate action. Here's what to do now:

1. Contact the fraud departments of any one of the three major credit bureaus to place a fraud alert on your credit file. The fraud alert requests creditors to contact your existing accounts. As soon as the credit bureau confirms your fraud alert, the other two credit bureaus will be automatically notified to place fraud alerts, and all three credit reports will be sent to you free of charge.

To order a report: 1-800-685-1111
To report fraud: 1-800-525-6285
and write: P.O. Box 740241, Atlanta, GA 30374-0241

To order a report: 1-888-Experian (397-3742)
To report a fraud: 1-888-EXPERIAN (397-3742)
and write: P.O. Box 9532, Allen, TX 75013

To order a report: 800-916-8800
To report fraud: 1-800-680-7289
and write: Fraud Victim Assistance Division, P.O. Box 6790, Fullerton, CA 92634.

2. Call the ID theft clearinghouse toll free at 877-ID-THEFT (438-4338) to report the theft.

3. Close the accounts that you know or believe have been tampered with or opened fraudulently. Use the ID theft affidavit when disputing new unauthorized accounts.

4. File a police report. Get a copy of the report to submit to your creditors and others that may require proof of the crime. It is important that you keep any evidence you may have related to your complaint.

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Other Frauds and Scams

Fraud on the Phone
Although the phone is the instrument of choice for many swindlers, much phone solicitation is legitimate. There are many worthy businesses and charities that have nothing to hide and will answer your questions freely.

Fraudulent Telemarketers
Watch out for fraudulent telemarketers! They may start with a postcard promising cash and prizes if you call an "800" or "900" number. If you do it, a friendly voice will ask for your credit card number to "verify" your identity, then come the high-pressure tactics to get you to buy merchandise with your credit card. Later, you may be billed several times, or you may never receive the merchandise at all.

If you do receive the merchandise, it may not be what you expected or you may feel that the price you paid was highly inflated. By that time, it is often difficult and time consuming to return the item and receive credit.

To protect yourself, ask for written information on products or services offered before you order them.

Fake Orders for Magazine Subscriptions
People selling magazine subscriptions may "offer" an extremely low price which is only available if you pay with a credit card. Repeatedly, terms like "verification," "identification," or "process" will be used to try to get you to reveal your credit card number. Once you give it, the con artist will use the number to place fake orders.

Never give anyone your credit card number on the phone unless you made the call to place an order or to make a donation. Do not make a donation to an unknown charity. Check with the Better Business Bureau to see if the organization complies with their standards.

Investment Frauds
In areas with a high concentration of senior citizens, investment frauds are usually carried out on a hit-and-run basis. These scams may involve the selling of coins, oil and gas leases, precious metals, and gemstones. The caller will flatter you as a "smart investor" who can recognize a good deal, then confide that if you sign up quickly you can get in on a great "opportunity." Remember these salespersons are professionals and gifted at getting people to believe them.

Also, consider that there are fees in most legitimate investment markets for every transaction--when you buy and when you sell. These fees can add up, especially if you have given your permission to automatically negotiate if the market seems to be changing. When someone calls with an investment opportunity, get the name, address, and phone number of the company. Request references and written materials. Always read carefully any forms before signing. Check with the Better Business Bureau, the Bureau of Consumer Protection, or perhaps the securities dealer at your bank or investment firm.

Pseudo Bank Examiner Fraud
This type of fraud begins when someone calls your home, identifies himself as a bank examiner, and says he needs your help to apprehend an employee, usually a teller, suspected of theft. You are asked to withdraw a specified amount of cash from your account. The caller says that a representative will come to your home, pick up the money, and redeposit it in your account to test the employee's honesty. He explains that the deposit must be in cash so that serial numbers on the bills can be checked. But once you give your money over to the "examiner," you never see it again.

Never turn large sums of cash over to anyone, especially a stranger. If you are approached by a so-called bank examiner or bank representative, always call your bank immediately to verify and alert them.

Travel Scams
Travel scams often combine phone and mail fraud. A phone call from a travel club announces that you are the grand prize winner of a contest. Chances are you never entered any such contest, but naturally you would be happy to win a prize. Then, you are told that this prize only can be obtained if you pay a membership fee to their travel club, as small as $10 or as much as $300 or more. And again, you must pay using your credit card. Once the callers have your card number, they can use it to fake orders.

The best way to defend yourself against questionable calls, other than to hang up, is to ask the caller to send you information in writing. Again, ask about the caller and the company. Remember, the use of excessive high pressure sales tactics is often a sign of a con artist at work.

Fraud at the Door
This can be the most frightening form of fraud, because the con artist is face-to-face with you, and self-protection is not as easy as hanging up the phone or throwing away a letter. Here are a few frauds to watch for:

The Pigeon Drop
This form of fraud is an old but still successful fraud that involves the supposed "finding of money," usually a wallet. The victim is approached by a stranger who, in conversation, mentions having just found a large sum of money. The catch is that to share in the find you must put up "good faith" money that will be held by a friend or employer of the con artist until it is certain that the money will not be claimed. You are asked to withdraw money from the bank, and hand it over for safekeeping. You can guess what happens when you try to pick up your share of the find and recover your "good faith" money. Nobody - and no money - is to be found.

Never get involved in a deal where you are asked to turn money over to a stranger. Call the police instead.

Funeral Chasers
In this situation, funeral chasers visit the family of a recently deceased person, claiming that the decedent made a down payment on merchandise which is scheduled for delivery the next day, but there's a balance due. They mention facts about the decedent designed to assure the family that the collector is legitimate. However, such facts are easily found in obituary columns and elsewhere. At times like these, family members may be easy to convince, and the so-called balance due often is paid.

Try not to make quick decisions under emotional or stressful conditions. Take time to think. Ask to see a receipt or order signed by the deceased.

Home Repair
This con game is spreading rapidly and will continue to do so as dwellings and their owners both grow older.

Someone comes to the door and says there is a problem with your house-- roofing, siding, electrical, driveway, whatever. They offer to fix the problem quickly at what seems like a reasonable cost. Once they have begun the work, however, major problems suddenly turn up that will cost more than the original estimate. Often the "experts" have created the damage themselves.

Before you let anyone work on your house, be sure to get several estimates for the repair. Ask for references.

When buying from door-to-door salespeople, you have certain protections under the Federal Trade Commission's "cooling off" rule. This rule gives you three business days to change your mind and to cancel any purchase of $25 or more that you made from your home or anywhere other than the seller's normal place of business.

Fraud through the Mailbox
Stolen Checks

A major concern for the elderly is the theft of checks from mailboxes and mail slots. Since the mail carrier delivers social security checks on the same day of each month, these and other predictable, routine payments are easy prey for theft. Stolen checks are easily turned into cash by thieves who know where to go and what to do.

The Social Security Administration strongly encourages direct deposit of checks. Seventy-five percent of those receiving social security benefits use direct deposit.

If you have any regularly scheduled payments, you should seriously consider direct deposit. Federal Reserve Banks and financial institutions process direct deposit transactions electronically through a national automated system. Contact your financial institution about payments that are eligible.

This overview was based on materials originally created by the Federal Reserve Bank of Philadelphia.

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Civis Bank News

Change in Customer Statement Presentment

Soon after September 11, 2001, The Federal Reserve, President Bush, and Congress accelerated an existing piece of legislation, which is changing check processing for the first time in decades. Under this new Federal Law known as Check 21 (The Check Clearing for the 21st Century Act) a new instrument will be introduced called a substitute check which will be regarded as the legal equivalent as the original check. The main goal of Check 21 legislation, which became effective October 2004, is to improve the overall efficiency and security of the nation's payment system.

This new program will have significant benefits to the customer, the bank, and the economy. It will eventually lead to a paperless transaction clearing process through out the Nation, which will most noticeably lead to the truncation of the customers checks.

In other words, the customer will not receive any of their original checks back in their monthly statement. If the customer desires a copy of an original check, a bank generated image of a check or a substitute check will take the place of the original check when presented as legal proof of payment. We will continue to send our customers a free monthly transcript (no checks) statement; however, due to Check 21 and the eventual truncation of checks nationwide, there will be a charge for a statement with check images.

Since 1998, the use of checks has been on the decline, and electronic forms (debt cards, ACH, etc) of payments have been increasing. The electronic form of payments surpassed the number of checks written, in the 3rd quarter of 2004. The Civis Bank, as well as other banks, must comply with Check21 operationally and thru technological changes. These changes benefit both the customers and the banks, in helping to reduce fraud, reduce float, and increase efficiency.

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