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Personal Finance Puzzlers: The Check is in the Mail Print
Friday, 5th January 2007 (by J.D.)This article is about Real-Life
On Saturday, November 4th, I mailed my monthly home equity payment. I know I mailed the payment because that was the day I took my car in to have it serviced. I walked from the shop to the post office to mail the check. It was the only thing I mailed. I used a comic-book stamp — The Flash — hoping to speed the check on its way. (Yes, I really do silly stuff like that.)
Payment wasn’t due until the 18th of November. The check had to travel from Portland, Oregon to Memphis, Tennessee. It had plenty of time. When it hadn’t cleared the bank by the 16th, I phoned to see what was the matter. They hadn’t received the check. “What should I do?” I asked the customer service rep.
“You can make a payment from your savings account,” she told me, and so I did. I made the payment for $50 more than the amount of the check. (So that I could tell the transactions apart.) It cleared within a couple of days.
Time passed. November turned to December. December waxed and then began to wane. My check still hadn’t cleared. “Maybe I did something wrong,” I thought. “Maybe the address wasn’t showing. Maybe I didn’t include a stamp and return address. Maybe it got eaten by the mail sorter.”
Finally, on December 18th, the check posted at my bank, 44 days after I mailed it.
Moral: Remember the story I shared about the person who was in foreclosure because of assuming mortgage payments were being deducted from a bank account? This could have been like that, but on a much smaller scale. Within reason, keep tabs on your finances. Also, an unspoken moral here is to never assume a check is lost. Either issue a stop payment on a wayward check, or keep the money in the bank to cover it.
January 5th, 2007 at 12:10 pm
This is why electronic transfers are the way to go when paying bills.
January 5th, 2007 at 12:23 pm
I use Quicken to manage my finances. My mortgage is auto drafted each month, and the rest of my bills require me to sign on to the respective websites and make an online payment.
I update Quicken daily to keep track of what has cleared as well as sign on to my online banking and see pending transactions.
One other thing I use is a matrix in Excel that maps my income and expenses on a bi-weekly basis (yes, I’m still living paycheck to paycheck). This allows me to see what bills need to be paid when, and out of which check. I’m also building an emergency fund so I can track how much should be deposited into my savings account for the emergency fund I’m building. Even when I’m not paycheck to paycheck, a $0 budget still works wonderfully.
January 5th, 2007 at 12:26 pm
I didn’t know you were in Portland! I love and miss Portland.
Also, that check situation is a very curious one indeed. I doubt I would have handled it so well.
January 5th, 2007 at 12:57 pm
We use the service through the bank where they will send the checks. We have had a couple times where we sent the amount for the mortgage to the wrong bill and had to scramble to make sure the mortgage got paid on time.
But, for your situation, I probably would have canceled the original check when you decided to do a different payment option.
January 5th, 2007 at 12:57 pm
I have a car payment with GMAC. Their website does not offer online payments, but has been saying for the last 2.5 years that it’s “coming soon”.
Last year about October, we mailed a payment. Payments are due on the 15th of each month. They called us at the beginning of November asking for a payment or it would show on our credit record. So we sent another one.
A couple of weeks later we got another call, still no payment. So we made one over the phone using the $8 outsourced check processing option. (The only option other than having the amount taken out of our checking account automatically. Husband and I have proven time and again that this is BAD NEWS for us.)
About 2 weeks later, we get another call that our November payment is late. Huh? There are 2 checks floating out there in lala land, plus a pay by phone! They still have not gotten either of the mailed checks. We made another $8-fee pay by phone.
About a week later, we get a notice from the post office that they had a mutilated check/envelope and it was destroyed. A photocopy was included. Well, there’s one missing check. The other came through about the time they called us to ask for our late December payment. It was NOT applied towards our January payment. It was over 60 days after we had mailed the original.
At this point, we wait for the payment to be almost a month late, GMAC to call us, and we make the payment by phone. This costs us $8 for the processing fee and $16 for the late fees, but I refuse to trust GMAC *or* the postal system with this payment anymore.
January 5th, 2007 at 2:11 pm
You are in Portland. Cool, I’m in Vancouver.
January 5th, 2007 at 2:18 pm
“This is why electronic transfers are the way to go when paying bills.”
Yep. I’ve been doing that for almost a year, and it’s really helped me get control of my bills & avoid late fees. I don’t have anything on auto-debit; that way lies complacency. But all of my bills are listed in one spot on my credit union website, I can view the amount due (an average guess for some bills, a number pulled from electronic invoicing on others), the due date, and the most recent payments, all on one web page. I get e-mail notices if I haven’t submitted a payment when the due date is approaching. And nothing is *ever* late …
January 5th, 2007 at 2:29 pm
That’s crazy, but crazy stuff like that happens every once in a while with the post office. The only check that I have to mail currently is my car payment, and I know that it usually takes just 3-4 days to get to the finance company and show up posted on my bank account. That makes it easy to see when it’s late.
I am curious what would have happened if you hadn’t made that extra payment and just let the check get there when it got there. It would have (barely!) not been 30 days late, so they couldn’t have reported it on your credit report. Also, isn’t it the law that a company has to accept a payment based on its postmarked date, not the date it’s actually received?
January 5th, 2007 at 3:05 pm
Sending stuff certified mail costs about $3.50. You get a receipt you mailed it and to whom and where and what day. You also get a receipt signed by the person who received it. They can’t refute that. I LOVE certified mail…
January 5th, 2007 at 7:48 pm
I have similar problems with personal checks, in that they aren’t negotiated promptly, and since we don’t keep a register, it’s hard to know if everything has cleared. Luckily I don’t use many checks.
January 6th, 2007 at 7:45 am
Whenever possible, if making electronic payments for bills, initiate the payment using the website of the entity you are making the payment to. If you use your bank’s online bill pay, often times all that does is tell the bank to SNAIL MAIL a check from your account to the designated recipient.
I had an auto payment check initiated using my bank’s online bill pay get lost in the mail. Luckily, I keep on top of these things. The auto-loan company didn’t care about my bank losing the check in the mail - they did allow me to initiate a 1-time phone payment to cover the bill. Eventually, the check showed up and I had a double payment on record - what a nightmare. If you initiate via the site of the company you’re paying, you have more recourse and can avoid double payments, etc.
January 6th, 2007 at 3:29 pm
[...] Get Rich Slowly ยป Personal Finance Puzzlers: The Check is in the Mail (tags: bank usps warning) [...]
January 8th, 2007 at 9:08 pm
It happened to me once as well, and thank goodness I check my credit card and checking account electronically every few days. It takes seconds and it has ensured that I have a clean credit rating, all these years. Like the first few responders said, electronic transfers are the way to go and will be the only way, one day. Another great reason to have money for emergencies, in an account that can wire transfer anywhere in a day or two. AND YOU DID SOMETHING SIMPLE THAT HAS SAVED MY BUTT MANY TIMES…YOU CALLED CUSTOMER SERVICE TO GET IT ON RECORD, before the due date elapsed. Great life lesson that I hope many others learn and thanks for sharing.
June 22nd, 2007 at 3:32 pm
I bank with an online only bank and I mail in deposits. One time I mailed in a 250 deposit and I actualy forgot about it. 2.5 months later the deposit shows up on my bank recon. i could not even remember where I got the money for about half a day