Monday, August 10, 2009

Bank of America television commercial

Over the weekend I saw a new television commercial for Bank of America, in which they were talking about their new mobile banking and how wonderful it is. They had different people, who I assume we were supposed to believe are bankers, that were listing off all of the great features.

Now, none of this would have ruffled my feathers, until one of the people was talking about the different kinds of alerts that you can be sent, and he said that you could be sent an alert that tells you when a check clears. WHAT!?!?! How is that possible when

1) The employees in the bank cannot even really tell you when a check is clear. The best that they can tell you is that they have not found any holds or issues with the check yet. Oh don’t get me wrong, they will say the words “the check is clear” but that does not mean it has been authorized, approved or without obstructions . . . which by the way are some of the dictionary’s definitions of the word “clear”.
2) The term clear does not really mean anything in the world of banking. A check will show as “clear” until a problem comes up with it, so it could be clear today, and then be found to be counterfeit the very next day.

If we look up the term clear from The Federal Reserve Bank of Minneapolis, a place that should know it’s banking terminology, we find this . . .

check clearing
The movement of a check from the depository institution at which it was deposited back to the institution on which it was written, the movement of funds in the opposite direction, and the corresponding credit and debit to the accounts involved. Check clearing also encompasses the return of a check (for insufficient funds, for example) from the bank on which it was written to the bank at which it was deposited, and the corresponding movement of funds. The Federal Reserve Banks operate a nationwide check-clearing system.

So you can see, by the definition in banking terms, check clearing merely describes the process of the check moving through the system, and no where in it does it say that check clearing means that the check has finished that process or that it is “authorized, approved or without obstructions”.

So why, when banking customers ask a bank employee “How long until I will know if this cashier’s check is good?” do the bank employees respond with comments like “The check will be clear in 24 hours.” And, why is Bank of America is promoting that one of the wonderful functions of their new mobile banking service is that you can be told when a check is “clear” if as we have just seen from the information about “clear” does not really tell you anything about the authenticity of the check or that payment has been received.

That would be a better function . . . if it could notify you when payment has been received and collected by the issuing bank and the cehck was proven authentic.

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