Relay-Version: version B 2.10 5/3/83; site utzoo.UUCP Posting-Version: version B 2.10.2 9/18/84; site brl-tgr.ARPA Path: utzoo!watmath!clyde!burl!ulysses!allegra!mit-eddie!think!harvard!seismo!brl-tgr!floyd From: floyd@brl-tgr.ARPA (Floyd C. Wofford ) Newsgroups: net.legal Subject: Re: using credit card numbers for check id. Message-ID: <1262@brl-tgr.ARPA> Date: Thu, 5-Sep-85 14:06:05 EDT Article-I.D.: brl-tgr.1262 Posted: Thu Sep 5 14:06:05 1985 Date-Received: Sat, 7-Sep-85 05:55:45 EDT References: <272@decwrl.UUCP> Reply-To: floyd@brl-tgr.ARPA (Floyd C. Wofford (MMW) ) Organization: Ballistic Research Lab Lines: 91 In article <272@decwrl.UUCP> carleton@janis.DEC writes: >Can someone let >us know what happens to a check from the time you write it until the time you >get it back from the bank ?? How many people see the check before you get it >back ?? Is it a good idea for all these people to have access to my credit >card number. ?? > >DMC@DEC Let us present our check to a teller. She/he may see it, probably not. In the smallest offices the check volume usually (from my experience) does not allow a teller the luxury of reading the checks. From there they may be microfilmed before going to a proof operator. The proof operator (that used to be me) sits at a super sized cash register/adding machine and merrily encodes the checks with magnetic ink (MICR for the acronym) for the value which appears on its face. This is a manual job, i.e. some poor underpaid employee does each individual check. The reason for the microfilming step before the proof process is to protect from dishonest operators (yes, it has happened). Next the checks must be entered into the bank's accounting system. This is performed by computer with the aid of an MICR reader. This is an overgrown monster of a peripheral which has off-capabilities for sorting, usually by account number. Since things have to be done fast, the accounting and preliminary sorting are done in one step. The operator who feeds the MICR reader has his grubby hands on the checks for this task (I used to do this too). In the preliminary sort checks are broken down into 'on us', 'local clearing', and 'clearing' or 'corespondant' items. These piles of checks are usually microfilmed immediately, before they are shipped. Again a process done by hand. 'On us' are checks drawn on the same bank doing the processing. An example, Bluto has an account in Wimpy's bank. If Bluto cashes his check in a branch of Wimpy's bank, Wimpy refers to the check as an 'in house' or 'on us' item. In house items stay in the bank. They are sorted, another human operation (usually the same operator who ran the MICR reader, or the next shift). After this they go to the demand deposits section (checking accounts) where some clerk puts them with the other checks you have written in the past month. At the end of the month a lot of peoples checks are stuffed into envelopes, either by a nice machine or nicer people, and mailed to the customer. Remember the clearing items? Well if Bluto's check went into Popeye's bank it must finally get to Wimpy's. If Popeye is in the same city the checks are referred to as local items. Popeye, Wimpy, Olive Oyl (if she is a banker) and others will exchange checks which are drawn on each other. When they do then each bank will go about posting each of their checks to their accounts. Include a photographing step and finish processing like the in house items. Should Popeye's bank be in a different state or geographic region, the process gets streched out a little. Banks keep money in other banks to pay for a service called 'correspondant bank'. If Popeye is in Los Angeles and Wimpy is in Dagsboro, Delaware, we have to get the check back from LA (or to there to collect). Olive Oyl has a bank in LA too (she loves to be near Popeye). If Wimpy gets any check drawn on a bank in LA, he sends it to Olive Oyl, who takes care of the collection of all Los Angeles monies for him. For her services she collects the interest on money deposited in her bank by Wimpy. The same clearing process (together with all the human handling) in incurred by Olive Oyl. When Popeye gets the check the end processing is the same as in house items. Perhaps this is too long winded, but its to prove a point. In house items are processed in 1 day and handled by ~5-8 people. Local items, 2 days, add 2 to 3 more people. Add 1 day and two to three more people for each correspondant bank. Now not everyone who might have potential contact will actually handle your check. Each could, but the sheer volume precludes individual attention, unless an apriori motive is in action. Assume three people actually touch your check, double that if you bounce. It is not unreasonable to assume that this many do touch your check at minimum. I would doubt if the maximum number would ever touch it. Also, if any irregularities occur then double the amount. These can range from having a hungry machine eating your check in any point in the system or having the magnetic ink on the check unrecognizeble by a MICR reader. Irregularities get processed by hand. In my opinion, you are pretty safe in using a credit card number as identification. Probably the only one who would take the time to look at it would be the merchant accepting the check. If they get into a crunch with collection (the merchant), should your check bounce, they have your account number... But this is another legal problem. I hope I have not bored you all too much.. floyd@brl.arpa