• Report: #526070
Complaint Review:


  • Submitted: Thu, November 19, 2009
  • Updated: Wed, July 13, 2011

  • Reported By: Steve — Pasadena Texas U.S.A.
1014 Vine Street Cincinnati, Ohio United States of America

KROGER GROCERY Returned check fees being processed as a check to your bank account Cincinnati, Ohio

*Consumer Comment: Chk number is not relevant.

*Consumer Comment: I don't think those laws apply here

*Author of original report: Two wrongs don't make a right

*Consumer Comment: Interesting Twist..

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Kroger is sending their returned check fee in as a new check to your account in order to collect their fee. They will use the same check number as the check you originally wrote but the transaction is actually processed as a new check. Kroger or its processing agent can not do this legally from my research.

It is my opinion the reason they are doing it this way is to take advantage of the customers bank bounce protection. A lot of banks do not allow electronic transactions such as debit card and ACH's to be covered by bounce protection. Doing it this way insures that they will be able to collect.

If for some reason the check the merchant wrote for the fees fails to clear you will be assessed the normal bounce check fee at the bank because it is a check even though you did not write it or authorize it. Keep in mind checks can be sent through up to three times...the NSF fees could easily add up to hundreds of dollars for one check considering one check has been illegally converted in to two separate checks.

In order to collect fees directly at your bank the merchant must convert your check in to an ACH, hand you their written policy, simply publicly posting it is not enough. Most places like Walmart make you sign the receipt. This receipt notifies you of what can happen and provides them with authorization to do the electronic transaction.

Kroger does not do this. Kroger accepts the check and if returned presumes automatic authorization and creates a new paper check on your behalf. Under the regulations this is called an RCC, remotely created check. There are regulations that specifically deal with this type of transaction under Regulation CC
(d) Transfer and presentment warranties with respect to a remotely created check. (1) A bank that transfers or presents a remotely created check and receives a settlement or other consideration warrants to the transferee bank, any subsequent collecting bank, and the paying bank that the person on whose account the remotely created check is drawn authorized the issuance of the check in the amount stated on the check and to the payee stated on the check. For purposes of this paragraph (d)(1), account includes an account as defined in 229.2(a) as well as a credit or other arrangement that allows a person to draw checks that are payable by, through, or at a bank.

Merchants deserve to get their money and a fee for dealing with bad checks, but there is a right way and a wrong way....this is clearly the wrong way as it side swipes the consumer and can cost them far more than the original NSF fee.

This report was posted on Ripoff Report on 11/19/2009 06:47 PM and is a permanent record located here: http://www.ripoffreport.com/reports/kroger-grocery/cincinnati-ohio-/kroger-grocery-returned-check-fees-being-processed-as-a-check-to-your-bank-account-cinci-526070. The posting time indicated is Arizona local time. Arizona does not observe daylight savings so the post time may be Mountain or Pacific depending on the time of year.

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#1 Consumer Comment

Chk number is not relevant.

AUTHOR: I am the law - (USA)

The bounced check fee will bear the same number as the check it's related to. That's just a bank fact; not some sort of scam. How else do you supposed Kroger would get the money for the fee? Bill you for it? Come on.. think a little.
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#2 Consumer Comment

I don't think those laws apply here

AUTHOR: Tim - (U.S.A.)

I'm not sure on the law regarding this issue, particularly in the State of Texas.

But I think that you may be incorrect in classifying the manner in which the debit is presented as an RCC. It may, in form, be the same thing. But that does not necessarily mean that the same set of laws applies. In fact, the statute cited specifically refers to "a bank that transfers or presents a remotely created check . . ." By the plain language of the statute it does not apply to Kroger.

Also, Regulation CC applies to deposited funds availability. It has nothing to do with debits from accounts.

Here in Michigan, most stores that accept checks have a standard sign, posted at the register, informing you that the $25 NSF fee will be automatically deducted from your checking account.

And I've got to concur with Robert's closing implication. I can't even fathom why retail stores still accept paper checks. They inconvenience the other people in line and create an unecessary risk for the store, the cost of which is certainly passed on to consumers at large.

And, given that every checking account comes with a debit card these days, the only reason I can think of for someone to use a paper check at the grocery store is because they don't have any money in their account.

Bottom line, I can't see where Kroger has done anything wrong here. The only problem for the OP seems to be that the collection of the $25 caused further overdrafts.  

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#3 Author of original report

Two wrongs don't make a right

AUTHOR: Getaclue - (U.S.A.)

While its true the customer did write a bad check that doesn't give the merchant the ability to write another check on the consumers behalf to cover its fees.

As you stated merchants have many avenues to collect. Simply putting a consumer on TeleCheck or ChexSystems will suspend their writing privileges indefinitely. Merchants also have civil and criminal avenues to peruse.

If we were to apply this to say loan companies would it be OK if they created checks on the purchasers behalf to cover late or over the limit fees? It's the same thing..a fee is a fee.

If someone knows of a regulation that allows a merchant to create a paper check on the consumer's behalf without their authorization please post it. As far as I can tell there is only one option and that's through ACH conversion, an electronic check. The merchant must give you written notice of this.

Please keep in mind mistakes happen, not all people who bounce a check are trying to ripoff the merchant, or even "float" a check.
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#4 Consumer Comment

Interesting Twist..

AUTHOR: Robert - (U.S.A.)

While I do not know Texas law the statute you listed it appears to deal with a check when it is originally written.  There are probably additional statutes that deal with how they can handle(and resubmit) checks and the fees once it is returned by the bank.

FYI, there are additional statutes that allow them to prosecute the check writer for check fraud if they decide to go that route.  You can look up Penal Code Section 32.41 of the Texas State Statutes.

It is my opinion the reason they are doing it this way is to take advantage of the customers bank bounce protection.

- Your right how dare they try and take advantage of this.  I mean after the consumer wasn't trying to take advantage of anything were they.  Oh wait they probably were.  They were probably trying to take advantage of the "float" and when they bet they could beat the money back to the bank..they lost.


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