CHECK 21 - SUBSTITUTE CHECK

What is a substitute check?

To make check processing faster, federal law permits banks to replace original checks with "substitute checks." These checks are similar in size to original checks with a slightly reduced image of the front and back of the original check. The front of a substitute check states: "This is a legal copy of your check. You can use it the same way you would use the original check." You may use a substitute check as proof of payment just like the original check.

Some or all of the checks that you receive back from us may be substitute checks. This notice describes rights you have when you receive substitute checks from us. The rights in this notice do not apply to original checks or to electronic debits to your account. However, you have rights under other law with respect to those transactions.

What are my rights regarding substitute checks?

In certain cases, federal law provides a special procedure that allows you to request a refund for losses you suffer if a substitute check is posted to your account (for example, if you think that we withdrew the wrong amount from your account or that we withdrew money from your account more than once for the same check). The losses you may attempt to recover under this procedure may include the amount that was withdrawn from your account and fees that were charged as a result of the withdrawal (for example, bounced check fees).

The amount of your refund under this procedure is limited to the amount of your loss or the amount of the substitute check, whichever is less. You also are entitled to interest on the amount of your refund if your account is an interest-bearing account. If your loss exceeds the amount of the substitute check, you may be able to recover additional amounts under other law.

If you use this procedure, you may receive up to $2,500 of your refund (plus interest if your account earns interest) within 10 business days after we received your claim and the remainder of your refund (plus interest if your account earns interest) not later than 45 calendar days after we received your claim. We may reverse the refund (including any interest on the refund) if we later are able to demonstrate that the substitute check was correctly posted to your account.

Check over your account statement carefully when you receive it. If you find a problem relating to an Electronic Check Conversion, you have 60 days from the date the statement was sent to ask for an investigation. We may then take up to 45 days from the date of notification to complete our investigation.

How do I make a claim for a refund?

If you believe that you have suffered a loss relating to a substitute check that you received and that was posted to your account, please contact us at:

IEG Federal Credit Union
375 Kekuanaoa Street
Hilo HI 96720-4360
(808) 961-6691 or 1-(800) 762-3958
email: iegfcu@iegfcu.com

You must contact us within 40 calendar days of the date that we mailed (or otherwise delivered by a means to which you agreed) the substitute check in question or the account statement showing that the substitute check was posted to your account, whichever is later. We will extend this time period if you were not able to make a timely claim because of extraordinary circumstances.

Your claim must include:

• A description of why you have suffered a loss (for example, you think the amount withdrawn was incorrect)
• An estimate of the amount of your loss
• An explanation of why the substitute check you received is insufficient to confirm that you suffered a loss; and
• A copy of the substitute check [and/or] the following information to help us identify the substitute check: the check number, the name of the person to whom you wrote the check, the amount and date of the check.

What are some other points I should consider regarding Electronic Check Conversion?

• At the time of purchase, be certain that you have sufficient funds in your account to cover the amount of the sale.
• Before you leave the store, make certain that the merchant has handed you a copy of your signed receipt and the voided check. Double check to be sure that the dollar amount on the receipt matches the dollar amount of your purchase.
• Never use the same blank check to make more than one Electronic Check Conversion transaction. Repeated check numbers on your account statement would make it prohibitively difficult for our credit union to resolve any discrepancies.
• Bills you pay by check through the mail may also be handled as Electronic Check Conversion transactions. By sending your check, you have agreed to the Electronic Check Conversion. Parties converting your mailed check are not required to provide you with a receipt and our Credit Union will not receive a check to return to you.

Do I have to agree to Electronic Check Conversion?

No. If you do not wish to have your check converted, simply pay for your purchase using other accepted means, such as: cash, debit or credit cards.