Tactics for avoiding the thumbprint-for-cash request

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Does providing a thumbprint or fingerprint to cash an honestly-received check make you feel like a criminal? The practice adopted by many U.S. banks to protect itself and its customers from fraud, though understandable from a loss prevention perspective, makes me uneasy. Being asked to place my very personal identification on the face of a check just because I don’t have account with that particular bank is disturbing but, typically, my standard business and banking procedures have allowed me to avoid being printed. Recently, though, I’ve had to take a more proactive approach through insight I’ve gained from a banking regulator.

If you’ve been asked to place your print on the face of a check, you may not have been bothered at all, may have been in a rush and not considered the privacy concern, may have been annoyed but complied to get your money, may have protested but received a stubborn refusal to make a rule exception, or were so outraged that you left the bank still holding the check. The what-seems-to-be-simple solution is to deposit the check with your own bank and let it clear through the normal settlement process. The problem, for many honest citizens with valid bank accounts, is that if the check is returned for non-sufficient funds and is then presented for collection (my former way of doing business), the thumbprint rule still applies.

Okay, the customer may have had a bad account-balancing day (bothersome but forgivable) or he/she could have intentionally written a check with non-sufficient funds (a criminal act in some states). So, the fact that the customer’s bank insists on capturing, digitally storing, and sending an honorable person’s thumbprint (possibly via a returned check or image of the check) to such a customer is upsetting.

All banks that operate legally in the United States have state or federal charters, and must abide by state or federal regulations. So I called a state bank regulator and visited the Office of the Comptroller of the Currency (OCC) website to see what I could learn about the thumbprint/fingerprint rule. Apparently, the practice is not prohibited so banks can adopt the requirement as a rule. And, according to an OCC report (PDF), Check Fraud: a guide to avoiding losses, “any financial institution that implements this type of plan should adopt procedures to ensure that it is not applied on a selective basis” (bolded by OCC, not me), meaning that protests will make no difference. An outraged person in the teller line is preferable than accusations of profiling.

My bank regulator did advise me, however, that honest citizens are not defenseless. Just as banks can set their rules, so can merchants and service providers, who can make a rule not to accept checks written on accounts from these fraud-averse banks. So, here are tactics to avoid being printed if you so choose:

• Identify banks with thumbprint policies and do not accept checks written on accounts associated with these banks.  Accept payments in the form of cash, checks drawn on other banks, money orders, cashier’s checks, debit cards, credit cards, or PayPal authorization. 
• If you happen to accept a check drawn on a print-insistent bank, determine if the account is valid and there are sufficient funds to cover the check by calling the bank’s merchant check verification line (listed in the white pages), and providing the checking account number and the check amount. If yes (funds are available), deposit the check at your bank and hope that by the time your check is presented, funds will still be available. Since check clearing and settlement times may take 3-6 days, this solution is not foolproof but could be useful.
• Contact the customer who presented a check with non-sufficient funds and request payment.

Alternatively, you could contact your congressperson and ask for a change in regulations.