Is it reasonable to apply an NSF fee to an incomplete counter check?
July 27, 2016 4:36 AM Subscribe
I submitted a bunch of rent checks to my housing non-profit for six months ahead. One of these was a counter check—printed in-branch by the teller without name or address, just my bank account routing code. Unfortunately, it seems that the teller didn't properly review all the checks before giving them to me, and one of them did not have my account info on it. Neither I nor my housing non-profit noticed this omission before the check was deposited, and of course it was returned by their bank with "Unknown Account" on it. My housing authority chose to consider this an NSF check, and are requesting that I pay their NSF fee. Is that a reasonable request?
I first learned about this when I received, by registered mail, an eviction notice mid-month. (My housing authority sent out a letter earlier in the year informing us that calling people when they were late with their rent was not working, and that from now on they would simply send an eviction notice, giving one ten days to pay the outstanding amount along with an NSF fee.) I was, needless to say, shocked to receive this, since I have never once been late with my rent, and there was sufficient money was in the account to cover the rent check.
When I called them to find out why my check was returned, I asked them to read out my account number from the bottom of the check, and it simply was not there.
Realizing the bank teller's oversight, I explained what must have happened, and told them I would come in the next day to pay in cash. The person on the phone, when asked, wasn't sure if I would still be expected to pay the NSF fee. When I went in to pay, they accepted my rent payment in cash, and did not mention the NSF fee (though I was dealing with a front counter person, not someone in the office). Now, a month letter, I receive a letter informing me that they received the outstanding rent payment from me, but not the NSF amount, and would I please send them a check for that.
As a matter of principle, I am disinclined to pay this fee. The check was not returned "NSF," but "Unknown Account," and this was not due to any negligence on my part, but due to an oversight on the part of the teller who printed off the counter checks for me (the others were properly done). If the housing non-profit people had simply called me, I could have explained what had likely happened and told them that I would come in to pay on the following day. However, unwaveringly adhering to their new policy of not calling tenants whose checks are returned "NSF," they chose to send me an eviction notice by costly registered mail. (My bank, by the way, say that while they would waive any fees they themselves imposed in a case such as this where their employee was at fault, they can't be expected to cover fees charged by a third party due to such an error.)
My questions, then, are: 1. Has anyone, in similar circumstances, received compensation from their own bank for fees charged by a third party, and 2. Is it reasonable for my housing authority to impose this NSF penalty upon me when the check was not, in fact, returned "NSF," the money was in the account the entire time, and I acted in good faith at every point?
I first learned about this when I received, by registered mail, an eviction notice mid-month. (My housing authority sent out a letter earlier in the year informing us that calling people when they were late with their rent was not working, and that from now on they would simply send an eviction notice, giving one ten days to pay the outstanding amount along with an NSF fee.) I was, needless to say, shocked to receive this, since I have never once been late with my rent, and there was sufficient money was in the account to cover the rent check.
When I called them to find out why my check was returned, I asked them to read out my account number from the bottom of the check, and it simply was not there.
Realizing the bank teller's oversight, I explained what must have happened, and told them I would come in the next day to pay in cash. The person on the phone, when asked, wasn't sure if I would still be expected to pay the NSF fee. When I went in to pay, they accepted my rent payment in cash, and did not mention the NSF fee (though I was dealing with a front counter person, not someone in the office). Now, a month letter, I receive a letter informing me that they received the outstanding rent payment from me, but not the NSF amount, and would I please send them a check for that.
As a matter of principle, I am disinclined to pay this fee. The check was not returned "NSF," but "Unknown Account," and this was not due to any negligence on my part, but due to an oversight on the part of the teller who printed off the counter checks for me (the others were properly done). If the housing non-profit people had simply called me, I could have explained what had likely happened and told them that I would come in to pay on the following day. However, unwaveringly adhering to their new policy of not calling tenants whose checks are returned "NSF," they chose to send me an eviction notice by costly registered mail. (My bank, by the way, say that while they would waive any fees they themselves imposed in a case such as this where their employee was at fault, they can't be expected to cover fees charged by a third party due to such an error.)
My questions, then, are: 1. Has anyone, in similar circumstances, received compensation from their own bank for fees charged by a third party, and 2. Is it reasonable for my housing authority to impose this NSF penalty upon me when the check was not, in fact, returned "NSF," the money was in the account the entire time, and I acted in good faith at every point?
Yeah, this one is on you. I would personally attempt to extract the money from your bank but I would immediately pay the fee.
posted by arnicae at 4:54 AM on July 27, 2016 [3 favorites]
posted by arnicae at 4:54 AM on July 27, 2016 [3 favorites]
When someone deposits a check that bounces due to NSF, the depositor is charged a fee; this is the main reason companies charge a fee to customers who give them rubber checks.
I would ask the rental company if they were charged the usual NSF fee for this check, or not. If they weren't, I wouldn't pay their fee. If they were charged, then I would pay the fee.
You could try to recoup the fee from the bank, I suppose, and they might even pay it in the interests of customer service... but I seriously doubt it's worth your time.
Note also: even if they didn't get assessed a fee, they have incurred the costs associated with just dealing with this weird rejected check deal, so they aren't totally in the wrong to ask for compensation. And, from the bank's point of view, printing counter checks is a courtesy, and somewhat of an annoyance: you could have avoided this situation by ordering enough checks, as bank customers are expected to do.
So, I think neither the rental company nor the bank owes you a pass here, but either is likely to give you one as a token of good faith. It's up to you if it's worth pursuing that, or whether you'll come out ahead in the long run by just paying the fee and forgetting about it.
posted by teatime at 5:07 AM on July 27, 2016 [1 favorite]
I would ask the rental company if they were charged the usual NSF fee for this check, or not. If they weren't, I wouldn't pay their fee. If they were charged, then I would pay the fee.
You could try to recoup the fee from the bank, I suppose, and they might even pay it in the interests of customer service... but I seriously doubt it's worth your time.
Note also: even if they didn't get assessed a fee, they have incurred the costs associated with just dealing with this weird rejected check deal, so they aren't totally in the wrong to ask for compensation. And, from the bank's point of view, printing counter checks is a courtesy, and somewhat of an annoyance: you could have avoided this situation by ordering enough checks, as bank customers are expected to do.
So, I think neither the rental company nor the bank owes you a pass here, but either is likely to give you one as a token of good faith. It's up to you if it's worth pursuing that, or whether you'll come out ahead in the long run by just paying the fee and forgetting about it.
posted by teatime at 5:07 AM on July 27, 2016 [1 favorite]
You were paying six months in advance? Why? Can you argue that "NSF check" wasn't even due yet?
posted by slateyness at 5:26 AM on July 27, 2016
posted by slateyness at 5:26 AM on July 27, 2016
First, ask the landlord if there are any more checks they are holding that do not have an account number on them. Second, I would ask them, as a sign of good faith on both of your parts, as someone who has never been late and a fine tenant to split the cost of the NSF fee.
posted by AugustWest at 5:59 AM on July 27, 2016
posted by AugustWest at 5:59 AM on July 27, 2016
Your first step is to read what your lease says about NSF fees, I bet that even though they are called "NSF" fees, the lease language will say something about "cheques returned unpaid" or something else equally broad. In which case, you need to suck it up an pay it because you agreed that you would (though, AugustWest's idea of asking to split would be reasonable).
Your second step is to come to terms with your responsibility for your actions here. You gave the housing authority a bad cheque. So it was due to "negligence on [your] part" because you neglected to review the cheques before you turned them in.
Your third step is to go to your bank and explain what the teller's actions have cost you and ask for compensation. If you've got a reasonable bank (and are a good customer) they may be willing to work with you.
posted by sparklemotion at 7:32 AM on July 27, 2016 [1 favorite]
Your second step is to come to terms with your responsibility for your actions here. You gave the housing authority a bad cheque. So it was due to "negligence on [your] part" because you neglected to review the cheques before you turned them in.
Your third step is to go to your bank and explain what the teller's actions have cost you and ask for compensation. If you've got a reasonable bank (and are a good customer) they may be willing to work with you.
posted by sparklemotion at 7:32 AM on July 27, 2016 [1 favorite]
Your argument would provide a mechanism for any renter to delay rent payment - they would simply send the landlord a partially blank check and say "well, it wasn't actually a NSF, it was just a blank check - ha!"
That should sound a bit silly, and I hope that gives you an idea of how other people here view your argument.
You should dispense with the notion of "not due to any negligence on my part" - it is both legally and practically irrelevant. When organizations deal with responsibility, they effectively only worry about "my responsibility" and "not my responsibility". You are taking on the responsibility to get money to them - all of it, on time, and in a valid check - and it doesn't really matter why you failed at that responsibility. From their perspective, you didn't pay your rent. From that perspective, you should understand why they don't really care why you failed to pay your rent, just that you didn't and that it was your obligation to do so.
posted by saeculorum at 7:49 AM on July 27, 2016 [3 favorites]
That should sound a bit silly, and I hope that gives you an idea of how other people here view your argument.
You should dispense with the notion of "not due to any negligence on my part" - it is both legally and practically irrelevant. When organizations deal with responsibility, they effectively only worry about "my responsibility" and "not my responsibility". You are taking on the responsibility to get money to them - all of it, on time, and in a valid check - and it doesn't really matter why you failed at that responsibility. From their perspective, you didn't pay your rent. From that perspective, you should understand why they don't really care why you failed to pay your rent, just that you didn't and that it was your obligation to do so.
posted by saeculorum at 7:49 AM on July 27, 2016 [3 favorites]
I'd read your lease and ask a lawyer in your jurisdiction (e.g., at a non-profit housing clinic). If the bank charged your housing authority a fee, then it'd be hard for you to contest. But if it's for, e.g., their own hassle in coming back to you and collecting it, then quantifying that hassle as meaning you owe $x is something you could potentially debate in some jurisdictions if it isn't defined in your lease. I suspect that they won't give in easily, being a government agency, but you could try. IANAL, just someone who likes to read Nolo guides on certain topics, so talk to a local lawyer for better advice.
posted by salvia at 9:26 AM on July 27, 2016
posted by salvia at 9:26 AM on July 27, 2016
To your first question, yes. I once sat with a banker who transferred money from my account to my landlord's and gave me a receipt saying the transfer had been made. I didn't discover that it hadn't until my landlord called me.
My bank then paid the late fee - I think I had to supply them with a bill from my landlord and they paid him directly instead of me paying him and them refunding me. Anyway, this:
(My bank, by the way, say that while they would waive any fees they themselves imposed in a case such as this where their employee was at fault, they can't be expected to cover fees charged by a third party due to such an error.)
seems unreasonable, since had they not made the error, there would be no fees charged by the third party. I would press them on that.
To your second question, I think they're within their rights asking for a late fee. The rent didn't get paid, it wasn't their mistake, so the reason why isn't important.
posted by mgar at 6:13 PM on July 27, 2016
My bank then paid the late fee - I think I had to supply them with a bill from my landlord and they paid him directly instead of me paying him and them refunding me. Anyway, this:
(My bank, by the way, say that while they would waive any fees they themselves imposed in a case such as this where their employee was at fault, they can't be expected to cover fees charged by a third party due to such an error.)
seems unreasonable, since had they not made the error, there would be no fees charged by the third party. I would press them on that.
To your second question, I think they're within their rights asking for a late fee. The rent didn't get paid, it wasn't their mistake, so the reason why isn't important.
posted by mgar at 6:13 PM on July 27, 2016
They're within their rights asking for the fee. They incurred charges in the chargeback and they need to be reimbursed because you gave them the faulty instrument.
You should ask the bank if you can get a reimbursement for the NSF fee that you incurred because of them.
posted by inturnaround at 7:58 PM on July 27, 2016
You should ask the bank if you can get a reimbursement for the NSF fee that you incurred because of them.
posted by inturnaround at 7:58 PM on July 27, 2016
The fee seems reasonable because your landlord may have had to pay a returned/rejected check fee, and in any case had to spend time chasing you down for rent (and in fact did not receive the funds on time). It sucks, but ultimately it is your job to check whatever you're sending them to make sure it is correct. It's possible you can get your bank to reimburse this, but why not just order some checks? I believe the last time I ordered checks, I got hundreds of them for less than $10 (which is surely less than the NSF fee). Then you will not have to deal with this issue.
posted by rainbowbrite at 5:45 AM on July 28, 2016
posted by rainbowbrite at 5:45 AM on July 28, 2016
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It is due to negligence on your part. You bear the responsibility for paying your rent on time, your accepted a check with an error from your bank, and the instrument you handed over to your housing association was invalid.
The details of how that happened are not the housing association's problem. On the day the rent was due, they were unable to collect funds against the instrument you provided for payment. Ergo, you were late paying your rent and need to pay the late fee.
posted by DarlingBri at 4:51 AM on July 27, 2016 [13 favorites]