When $5,000 Doesn't Really Mean $5,000

Automation and technology, in many regards, has improved our lives.  One area that continues to concern me on a daily basis is within the banking systems.

Finding material to write about isn’t usually an issue, as so many things happen to me personally with my own banking, all of which never ceases to surprise me.

What was today’s bank error – the misapplication of my payment.

I sent in a check for $5,000 to my credit card company (a major bank in Connecticut) in an attempt to get my balance under control.  I used a check from our savings account (has a check feature) to pay the funds, and I wrote the check information into the register.

I monitored my credit card account details on-line each day, and soon a payment was posted to my account.  The issue – the payment was for $500 (not $5,000).  Thinking a payment I had already scheduled for $500 was what I saw, I didn’t think much of it.  A day later I received a confirmation for the withdrawal of the $500 from our savings account.

I looked back at my register, and I had written $5,000.  I figured I wrote the check for $500, when I intended to write it for $5,000 (I don’t write checks of this size all too often, so perhaps subconsciously I couldn’t bring myself to write this one).  I contacted my bank and requested an image of the check I had written.  Checks no longer get returned to account holders, and tracking down images are getting harder as I learned.  Turns out my bank never received an image – only an electronic file with the withdrawal information in the file.

I had to next call the credit card issuer and have them track down the image of my check, to determine if I had written it for $500 or $5,000, another venture.  Turns out I did in fact write it for $5,000 (and not $500).  Their processor entered my check incorrectly.

No big deal?  Well, interest tolls on the unpaid balance of your credit card.  If I chose their solution to send in another check for the difference, I would pay interest on the unpaid balance for the period until they received my second check (because of their posting error).

Rather, I required them to reprocess my payment for the correct amount ($5,000) as of the day they received it, recalculate the interest in my account, and credit me the proper amount.

This is just another example of why you really need to monitor your banking and credit card activity on a daily basis, and stay on top of your accounts and balances.  Don’t become complacent and rely on the systems and procedures of the financial institutions to get things right.