You may use the special process to get a 40 days from the date your bank provided Remember . . . refund of the money you lost. The amount the substitute check or from the date of the „ When a bank uses substitute checks, of your refund under the special process is statement that shows the problem. The Federal Reserve Board limited to the amount of your loss or the your checks may be processed faster. In general, you must amount of the substitute check that you Be sure you have enough money in received, whichever is less, plus interest „ Describe why you think the charge to your account to cover the checks that on that amount if your account earns your account is incorrect. you write. interest. If your loss is more than the „ Describe why you believe the original „ Always review your account statement amount of the substitute check, you may check or a better version of the substi- to make sure the charges are correct. Consumer Guide to have the right under other laws to recover tute check is needed to determine „ additional amounts of money. If you receive something other than a whether the substitute check should substitute check, be aware of your Check 21 and If your bank finds that your claim is valid, have been deducted from your account. rights to resolve errors under other you should receive your refund by the Substitute Checks „ Estimate how much money you lost state and federal laws. next business day after the bank’s finding. because of the substitute check. „ Unless your bank finds that your claim Contact your bank right away if you (Include any fees you were charged as a is not valid, you should receive up to $2,500 notice an error in your account. result of the substitute check. Also, alert of your refund (plus interest if your account your bank to any interest you lost, if earns interest) within 10 business days after your account earns interest.) your bank receives your claim. You should receive the rest of your refund (plus interest „ Provide a copy of the substitute check, if your account earns interest) no later than or give your bank information that will 45 days after your bank receives your claim. help it identify the substitute check and If your bank finds that your claim is not investigate your claim. valid, it will send you a notice explaining why. What if I have more questions about Your bank may reverse the refund (includ- substitute checks? ing any interest on the refund) if it can show Contact your bank. that the substitute check did not cause an error in your account. Visit the Federal Reserve’s web site on Check 21 at www.federalreserve.gov/ How do I file a claim under the special check21. refund procedure for substitute checks? Contact your state’s consumer protection agency or attorney general’s office for If you notice a problem with a substitute information on state laws that apply to check, you should contact your bank as checks and substitute checks. soon as possible. In general, to use the spe- cial refund procedure for substitute checks, you should contact your bank no later than

Board of Governors of the Federal Reserve System

FRB-50000-1004 checks with your account statements. If you Why do banks create substitute checks? A federal law, known as Check 21, makes it currently get canceled checks back with easier for banks to electronically transfer your statements, you will continue to Some banks find that exchanging electronic check images instead of physically transfer receive your checks unless your bank noti- images of checks with other banks is faster paper checks. This guide explains your rights fies you that it is changing your account and more efficient than physically trans- under Check 21 as they relate to substitute agreement. porting paper checks. In certain circum- checks. Substitute checks are special paper stances, however, banks may need to use a You may receive substitute checks in other paper check. To address this need, Check 21 copies of the front and back of your original Front of a substitute check limited circumstances. For example, your allows a bank to create and send a substi- checks that are created to replace the origi- bank may give you a substitute check if you tute check that is made from an electronic nal checks. ask to have a particular canceled check image of the original check. back to prove a payment. Also, your bank might provide a substitute check to you How does Check 21 affect you? Can I require my bank to return when returning a “bounced” check that you my original check? Because of Check 21 and other check- deposited into your account. system improvements, your checks may be By law, your bank may not pay a check No. In general, the law does not require processed faster—which means money may Back of a substitute check from your account unless you authorized your bank to return your original check. be deducted from your checking account that payment. In other words, you are pro- Not all copies of a check are substitute Many banks destroy original paper checks. faster. Before you write a check, make sure tected from having your bank pay the same checks. For example, pictures of multiple Other banks may store original checks for that your checking account has enough check from your account more than once or checks printed on a page (also known as an some period of time and then destroy them. money in it to cover the check. from having your bank pay the wrong image statement) that is returned to you Check 21 ensures that you have the same You may be one of the majority of consum- amount for a check. Check 21 does not with your monthly statement are not substi- legal protections when you receive a substi- ers who do not receive their canceled change these protections. However, tute checks. Online check images and pho- tute check from your bank as you do when checks with their account statements. Check 21 does give you special rights if tocopies of original checks are not substitute you receive an original check. Instead, you may receive “pictures” (known you receive a substitute check from your checks either. You can use image statements as digital images) of your checks, a list of bank. This guide explains your rights and other copies of checks to verify that What should I do if I receive a substitute your paid checks, or a combination of these regarding substitute checks. For your rights your bank has paid a check. check and there is a problem? items. Check 21 will have little or no effect in other situations, contact your bank. Check 21 provides a special process that on these practices. allows you to claim a refund (also known as On the other hand, if you do get your can- What is a substitute check? an expedited recredit) when you receive a celed checks back in your regular account A substitute check is a special paper copy substitute check from a bank and you think statements, you may notice some changes of the front and back of an original check. there is an error because of the substitute under Check 21. For example, your bank The substitute check may be slightly larger 4000067894 123456789 0145 0000029545 4000067894 123456789 0146 0000029545 check. For example, you may think that you may start sending you a combination of than the original check. Substitute checks 148 were charged twice for the same check. original checks and substitute checks in are specially formatted so they can be pro- your account statements. You may use a cessed as if they were original checks. The 4000067894 123456789 0148 0000029545 canceled substitute check as proof of pay- front of a substitute check should state: ment just as you would use a canceled “This is a legal copy of your check. You can original check. use it the same way you would use the The account agreement you have with your original check.” The following sample bank governs whether you receive canceled shows what a substitute check looks like.

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