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Problems Using An ATM To Deposit A Check

Wednesday, April 24, 2013 - 2:13 PM
This is a good example of the downside of trying to deposit a check in the new ATMs that take checks without an envelope. Harry Sit of The Financial Buff describes the problems he had when an ATM ate his check. The ATM dispute process is done through your own bank or credit union even if the problem is with an ATM owned by another institution. In Harry’s case, it was done through Alliant Credit Union, and the resolution process was long.
Ken TuminKen Tumin5,472 posts since
Nov 29, 2009
Rep Points: 125,708
1. Wednesday, April 24, 2013 - 3:42 PM
Thanks, Ken, it is good to know.

Lesson #1: Do not deposit large-sum checks through ATMs, especially in ATMs of another FI.  I am an offender for this lesson; often deposit large-sum checks via CO-OP ATM network since this is the only way to make deposits for one of my favorite credit unions.

Lesson #2: Test run the ATM deposit with a small-amount (say $1) check first; if one has to deposit checks in the ATM of another FI.

51hh51hh1,476 posts since
Jan 16, 2010
Rep Points: 6,427
2. Thursday, April 25, 2013 - 10:37 AM
The problem here isn't really one of depositing a check that is not in an envelop. This issue was for any problem deposit, they are all handled the same. Is it more likely for a problem to happen if the check is not in an envelop? Not necessarily, who knows. But envelopes get eaten too. And there can be any number of problems other than the deposit getting eaten. For one think these are just computers, and computers malfunction.

What this story does point up is the need for stricter regulations to require speedier accountability. Presuming the delay here was not Alliant, but the owner of the ATM machine (and something tells me that Alliant waited a little while before sending the query through to the ATM owner, if just to see if the transaction came through), weeks is unconscionable. They have to empty the machine every day and process everything daily, so certainly by a day later there is no excuse for them not to already know about any mangled or otherwise unaccounted for checks. When Alliant contacted them, hopefully by a day after that, there is no excuse for them not to be able to simply look at that day's processing and see they had a mangled check, and respond promptly.

Banks used to delay checks and put holds on them for 30 days, sometimes not even credit your account immediately. Only federal regulations stopped that, got your accounts credited immediately and the funds cleared within a couple days at most. This ATM delay should be handled no differently. AS this guy said, his check was only $30, so minimum to lose. But what if it had been a check for, say, $20,000 -- and waiting six weeks to learn if it was found and he would have the money to keep!

But there also seems to be an issue here with Alliant. The story suggests that Alliant would respond to the issue only once every three weeks. If Alliant gets a response today, they should respond to the accountholder today online and otherwise by mail as needed -- why should you be left twisting in the wind for three weeks before you find out what is going on!?

Also, re the comment about using only your own bank's ATM, Alliant has only about five ATM machines for the entire country, only at its about five branches. Alliant, and many others, rely on the ATM networks for their banking deposits and withdrawals. Even if you walk into a branch, you can only get as much cash withdrawal as you otherwise would have from an ATM -- in fact, I think Alliant might send you to their ATM to get that cash withdrawal. And Alliant is not in the credit union shared branch network, as most credit unions seem to be, so you can't even just go to a different credit union and make a deposit or withdrawal at the counter there.

I also note, this issue was with a check. Alliant, and many others, will also accept cash deposits at ATMs. But I don't think you can make a cash deposit at any ATM that does not use an envelop.
me1004me1004374 posts since
Jan 16, 2010
Rep Points: 2,604
3. Thursday, April 25, 2013 - 2:54 PM
I've never warmed up to using ATMs other than for getting quick cash (which they seem to handle ok). I simply don't trust them for exactly the reasons outlined above. I'd rather go to a teller and get a receipt for my deposit accompanied by a friendly smile.

I'm currently testing out mobile deposit and it seems to work fine...
darkdreamer4udarkdreamer4u178 posts since
Jun 11, 2010
Rep Points: 638
4. Tuesday, April 30, 2013 - 3:39 AM
I wrote the blog post. Lessons learned.

@me1004: I mentioned "without an envelope" because the ATM has to perform extra steps when you deposit checks without an envelope. If you feed multiple checks in one pass, there's also the possibility of it reading 3 out of 4 checks for example. It is possible to deposit cash without an envelope too. I've done it at the same ATM successfully.
harrysitharrysit3 posts since
Apr 30, 2013
Rep Points: 18