Bank of America’s Bill Pay “Corporate” Checks v. “Draft” Checks

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  • Updated 8 years ago
How can I get Bank of America to alter their version of Bill Pay to be more like what most banks offer as an alternative to old-fashioned check writing? Most accounts at Bank of America debit your funds long before the checks are cashed—or even arrive!

An ongoing dispute/learning exercise was elevated to BofA’s Executive Offices, and has stalled.

• My account issues “corporate” checks instead of “draft” checks
• My account is debited on the “Deliver By” date, regardless if the check is delivered, cashed, or lost
• Bill Pay issues draft checks on some Bank of America accounts
• Inconsistent information offered why Bill Pay/BofA/Chase (vendor) chooses corporate v. draft checks to issue
• Want Bill Pay to be a functional equivalent to sending personal checks without costing BofA or myself more money

I’d like to clarify a point that seems to get confused by BofA customer service personnel: This has nothing to do with Bill Pay’s ability to electronically issue e-Bill to payees on a published list. This is focused only on Bill Pay’s issuance of corporate v. draft checks to payees manually entered.

Many institutions also use Chase as its vendor to process electronic payments for “mutual customers” in the form of draft checks, that for all intents and purposes, function the same as personal checks, without the added cost of manual clearinghouse charges and customer-affixed postage.

I have received many bits and pieces of information, over a two-year period, from various sources, at various levels throughout Bank of America. Some of which include possible erroneous information, from a wide variety of senior staff, including three from the Executive Office, follow:

• Online Banking’s IT Department told me I could flag my account to always issue draft checks
• Was informed that Bill Pay, as an independent vendor to BofA, performs audits to determine which accounts will trigger corporate or draft checks when using the system online. Factors include credit score, bank history, etc., although since not solely relying on credit reports, not subject to Fair Credit Act Disclosure laws recently enacted, hence no public notice.
• Was informed that geography, time, amount, payee was a factor. This is probably due to confusion as stated above of e-Bill payees v. other payees.
• Was informed that Bill Pay would perform new audit in May–June 2008 of BofA’s account holders. My account may be reviewed for a change of status. No promises were made.
• More confusion re information about future “upgrades” to Bill Pay. Unless the upgrade features customer choice of corporate v. draft check issuance, which I highly doubt, this is not relative to my complaint.

All told, my issue is relatively simple: Make my account issue draft checks from Bill Pay as if I was sending a personal check. My account should only be debited when the check has cleared, after payee presents the check for payment. Again, this is the model followed by most banks, and still saves everyone money in clearinghouse fees and builds brand loyalty at the same time.

On the face of it, there seems to be discrimination towards my account v. another account BofA/Bill Pay would issue draft checks. I posit a hypothetical scenario of a “high-end” customer: Mr. Trump has a Money Market Checking with BofA and pays his daughter’s expenses through Bill Pay. Each month, he pays Ivanka’s landlord $8,000 for rent in some swanky Manhattan apartment. Given four-day delivery, and a possible week or longer timeframe if landlord holds on to the check, if his account is debited on the Deliver By date, yet the check is cashed a week later, The Donald would be very upset to learn he’d lost a week’s worth of interest on his Money Market account. (I’m confident Mr. Trump’s Bill Pay would issue draft checks for this reason alone.)

I’m sure you can see where I’m going with this...I believe there may be intended discrimination against customers who do not fit BofA’s model for issuing draft checks.

Now, after successfully gaining the Executive Office’s support to solve this problem, they fail to correct it.

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  • frustrated

Posted 9 years ago

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Additional Obfuscatory Info Given By the Executive Office
BofA reserves the right to decide how it issues checks, draft or corporate, based on internal factors, including the amount of checks issued in a given period by Bill Pay. This might mean that once the dollars that BofA has handed over to Chase to cover draft checks for a given period, the rest of the checks will be covered through the transfer of customer funds to directly guarantee those remaining corporate checks. This hardly makes sense, as it’s likely not making sense to you as you read this.
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There is no disclosure on what this "corporate check" really does; and I agree, it results in an interest-free loan to BofA. I'm checking into the legality of this, and the "service agreement" that says BofA can choose to pay by corporate check or by issuing a draft drawn on the customer's account is not full disclosure, and I feels falls short of my authorization necessary to debit my account prior to payment being made to my payee (let alone my payee depositing the money).