Positive Pay- May Not Always Seem Positive!

Because of the volume of checks issued by title companies, and the propensity for attempted fraud on those title company checks, almost all banks require title company accounts to participate in positive pay. With positive pay, the title company uploads the checks to the bank (usually just the check number and dollar amount, but sometimes also the payee on the check), who then compare the checks being presented to the database that has been created of these checks. This protects the bank, the title company and the customer from potential fraud situations. It can take up to two hours for the upload to make its’ way to the tellers terminal. The teller does have a profile on their computer that directs them to call the title company for verification of a check if the check does not appear on their system yet.

If the customer banks at an institution other than the institution the title company banks at, then the customer’s bank has no knowledge of the positive pay database of the issuing bank. Therefore, the check they deposit is only subject to the requirements of their bank (i.e., how many days a hold is placed on the check before it becomes available to them).

If the customer banks at the same institution as the title company then they may have to wait up to two hours before depositing the check for the bank to be aware of the validity of that check. The good news is that because it is drawn on the same bank as they are depositing to, there is no hold time on their check.

Therefore, the old adage “Patience is a virtue” becomes very prevalent. Equity Title Agency uploads every day at 8:00, 10:00, 11:30, 1:00, 3:00 and 4:45 to our bank advising them of checks that have been cut. If we are advised that a customer is going to be taking their check to Chase Bank, we can also do other uploads. However, there still is the potential of a two hour delay in the teller receiving the information. Even though Positive may seem to hold up your check cashing ability- without it, fraud could be much worse than it already is!

Tom Diller | VP Director Business Development | Equity Title Agency | 602-769-8226