Pop Quiz: If you pay your electric bill ($165.00), your gas bill ($32.00), your mortgage ($1100.00), your cable bill ($35.00), and your gym membership ($20.00) all on the same day, but you only have $1250 in your account, how many checks will bounce?
Well, if you have a credit union, the answer might be one, your mortgage payment because most credit unions will try to clear as many checks as they can. But, if you have a bank, you may be paying fees for four bounced checks. That's because many banks process checks in descending order. Which means the big checks get paid first.
Now, that could be a good thing, because you don't want a late mortgage payment. Or, it could be a bad thing, because now you are looking at approximately $100 is NSF fees. Which would you prefer?
Well, that was a rhetorical question because it doesn't matter what the check writer prefers. Most bank literature states the bank can process checks in the order they prefer.
One New Mexico lawyer doesn't think this is a fair practice and is attempting to file a class action suit against First Security Bank. There is a similar suit pending against Norwest Bank New Mexico and a class action case pending against NationsBank. In the case of First Security Bank, the bank processes checks from largest to smallest, but if there is a series of NSF checks, an employee personally decides how the checks will be processed and fees charged.
The main issue is the account holders believe they've not been alerted to the practice and what it means. Besides believing that their customers should not write checks if they don't have the funds in the account, most banks feel that larger checks are the more important ones and a company-wide national policy to process large checks first allows them to process all checks uniformly, thus reducing costs.
The attorney has five clients involved in the First Security case and he will be seeking class action status for the Norwest suit later in the year.
