My question is, customer A takes a check made out to her , to her bank A to cash it. Bank A writes the Customer A's account # on the back of the check. The check clears, Customer B who wrote the check, can see the customer A's accout number since they can image the checks. Is there a privacy implication in this scenario?
Thanks!

Possibly. The best solution to this is for the teller to record the customer's account number in the electronic journal rather than on the check.

The Jan. 02 Q&A will help you out.

I.3. Q. I offer consumer checking accounts. I notify my customers that, among other things, I make disclosures as permitted by law. My checking account customers deposit checks made payable to my customer but drawn on a financial institution unaffiliated with me. My practice is to write my customer’s account number on the back of the deposited check to facilitate its processing. The check itself then goes to the maker’s financial institution, with my customer’s account number on the check. Is this a disclosure of nonpublic personal information that would be subject to opt out requirements or the prohibition against sharing account numbers?
A. No. The opt out provisions do not apply to disclosures in
connection with servicing or processing a financial product or service that a consumer requests or authorizes. Nor do they apply to disclosures that are required, or are a usual, appropriate, or acceptable method in connection with settling, processing, clearing, transferring, reconciling or collecting amounts charged, debited or otherwise paid. §§ 216.14(a),
216.14(b)(2)(vi)(A). Also, because the account number is added to the check solely for use in processing the check and is not used in connection with marketing by a third party, this disclosure is not prohibited by the ban on disclosing account numbers for marketing purposes. § 216.12.

Yes, but I think this could also be a privacy issue as well (if examiners want to make it one). But really, there is not much way to protect your account number anyway. Every time you write a check you have put it out there for countless other people to see. Unfortunantly, I have gotten so paranoid that I pay most things like groceries, restuarant tabs, etc. in cash (except for bills where I need a receipt. I never really worried about such until I was robbed and the crook stalked me at work. When I go into a store now, my cash in hidden in a pocket, my credit card is at home, my drivers license, insurance card and address/phone book are hidden in the car and I never take business cards with me anymore. I do take my cell phone so I can dial 911. I'm a sad case...right?

And on top of all that, I am one of those unloved Compliance people. You know......never appreciated...well.... maybe sometimes.

I believe it is out of the area for consideration as a privacy violation because it is a commonly accepted practice to complete a transaction and the Q&A reiterates that.

This doesn't mean opinions and rulings won't change, nor that a customer may get upset about it.

I am reviving this post to see what the general consensus is about writing account numbers on checks. As Andy pointed out, GLB is OK with it but we are getting more customer complaints about it.

How many of you out there (actually your bank) write the account number on the back of a third party check when you accept it for deposit?

Our bank doesn't, we write the RIM (Relationship Information Management) number on the back of the check. The RIM # is in conjuncition with our system (Phoenix). When the RIM # is entered into the computer all information under that number is pulled up. One RIM per customer. This is how we get by writing account numbers on the back. If the customer has written the account number on the back, there is nothing we can do, but we train our tellers to never write the account # on the back of the check.

I, personally, always write my account number on the back of the check when making a deposit. I had to do that when I was a teller quite a few years back, so I guess "old habits die hard"!

When I get a check, I usually endorse it, then write "For Deposit Only to Account #xxxxxxxx." I started adding the account number after hearing about the court case where someone endorsed their checks "For Deposit Only." The checks were either lost or misappropriated, and someone deposited them to an account with a completely different name and another bank.

The original payee tried to collect from the Depository Bank, but the court ruled that "For Deposit Only" meant that the checks could only be deposited but did not limit WHERE the checks could be deposited. Apparently, since the original payee had actually endorsed the checks, there was no action for fraudulent endorsement.

Go figure.

"The checks were either lost or misappropriated, and someone deposited them to an account with a completely different name and another bank"

*looks puzzled*

the check was deposited to an account unrelated to the payee and it was okay? Been a while since I was in the deposit side, but I thought the payee and the account ownership had to match or there had to be an endorsement?

IMNSHO, FWIIW

What we have found useful at our bank is we write the last three digits of the customer's account number on the back of the check. This way we have a reference of what account we cashed it against if it were to come back. Customers seem to like it because their entire account number is not given out.

Endorsement stamps used by busineses usually have the "For Deposit Only" followed by the account number. So in answer to your question about how many write the account number on a check. Checks written to businesses usually have the account number stamped on them.

Thanks for all the feedback - I think what we are getting from our customers is reaction to more privacy awareness and they are forgetting that everyone THEY write a check to gets their account number.

In reply to:

---

the check was deposited to an account unrelated to the payee and it was okay? Been a while since I was in the deposit side, but I thought the payee and the account ownership had to match or there had to be an endorsement?

---

It's been awhile since I read about the case, and I don't have a cite handy, but what I remember went something like this.

* Check for a large amount of money was made payable to John Doe. John Doe endorsed the back of the check "John Doe - For Deposit Only."

* Then John Doe lost/misplaced the check, and Jack Smith found the check. Jack Smith took the check to his back and deposited it into his (Jack Smith's) account.

* John Doe found went back to the person/company who wrote him the check and asked for a replacement to the lost check.

* Person/company checked their records and found the check had been paid. They got the cancelled check from their bank and gave John Doe a copy.

* John Doe then sued Jack Smith's Bank saying they had wrongly negotiated the item. The court ruled against John Doe. The court "reasoned" that the check had been negotiated by the actual payee (no forgery involved), and that Jack Smith's bank accepted the check for deposit as per the endorsement restriction. The court ruled that if John Doe had wanted to restrict the deposit of the check to his (John Doe's) account, then he should have specified that in the endorsement.

Yes - the case goes against most forms of logic, but there you have it. Ever since I heard about that case, I've always endorsed my checks with my account number. As someone points out in another post on this thread, everytime you write a check, you give your account number to someone.

Sometimes I think the Privacy gremlins go too far. Really, what's next - truncated MICR lines?

Hi,
We still write account numbers on the backs
of checks, and when someone complains,
they just write it on after the customer leaves.
As a previous poster stated, these people's account
numbers are all over the place. I tend to think
that some people don't realize that fact.

Do you feel it would be okay to write customer account numbers on disbursement checks the bank creates?