Express check conversion

• US 7,660,771 B2
• Filed: 10/30/2003
• Issued: 02/09/2010
• Est. Priority Date: 10/30/2003
• Status: Active Grant

• Current Assignee: Wells Fargo Bank NA (Wells Fargo & Company)
• Original Assignee: Wells Fargo Bank NA (Wells Fargo & Company)
• Inventors: Orcutt, Laura Lee
• Primary Examiner(s): Elisca; Pierre E
• Application Number:
  US10/699,552
• Publication Number:
  US 20050097050A1
• Time in Patent Office: 2,294 Days
• Field of Search: 705/64, 705/42, 705/35, 705/1
• US Class Current: 705/64
• CPC Class Codes: G06Q 20/042 characterized in that the payment protocol involves at least one cheque
• CPC Class Codes: G06Q 20/108 Remote banking, e.g. home banking
• CPC Class Codes: G06Q 20/26 Debit schemes, e.g. "pay now"
• CPC Class Codes: G06Q 20/382 insuring higher security of transaction
• CPC Class Codes: G06Q 40/00 Finance; Insurance; Tax strategies; Processing of corporate or income taxes
• CPC Class Codes: G06Q 40/02 Banking, e.g. interest calculation or account maintenance credit or loans G06Q40/03
• CPC Class Codes: G07F 7/04 by paper currency

Abstract

A technique is provided for automatically converting checks to ACH debits. The process is a two-part process in which the MICR line in a check is read at the point the check is presented and a decision is made if the check can be converted to an ACH debit. The decision is made by applying various rules. If the system is unable to convert the check to an ACH debit, then the check is processed as a normal check. If a decision is made that the check can be processed as an ACH debit, then the MICR line is parsed for the financial institution which issues the check to create the ACH debit.

Claims

1. A method for processing checks, the method comprising:

scanning a check drawn against an account associated with a consumer to capture information needed to create an ACH debit;

automatically determining, at a computing apparatus, based at least in part on the captured information, whether the check is eligible to be converted into an ACH debit by;

determining whether the check is a consumer check;

determining whether the consumer has been notified that the check will be converted into an ACH debit;

determining whether the check is associated with a financial institution that does not accept ACH transactions;

determining whether the consumer has refused to allow conversion of the check into an ACH debit; and

evaluating a length and a position of a Magnetic Ink Character Recognition (MICR) line of the check to determine whether the check can be converted into an ACH debit;

depositing the check at a financial institution when a determination is made that the check is not a consumer check;

depositing the check at the financial institution when a determination is made that the consumer has not been notified;

depositing the check at the financial institution when a determination is made that the financial institution does not accept ACH transactions;

depositing the check at the financial institution when a determination is made that the consumer does not allow conversion of the check into an ACH debit;

depositing the check at the financial institution when a determination is made that the evaluation of the MICR line indicates that the check cannot be converted into an ACH debit; and

automatically creating, at the computing apparatus, an electronic file that contains the information needed to create an ACH debit when a determination is made that the check is eligible to be converted into an ACH debit because the check is a consumer check, the consumer has been notified, the financial institution accepts ACH transactions, the consumer allows conversion of the check into an ACH debit, and evaluation of the MICR line indicates that the check can be converted into an ACH debit.

2. The method of claim 1, further comprising:

receiving, at a lockbox, an envelope that contains the check; and

prior to scanning the check, removing the check from the envelope.

3. The method of claim 2,

wherein the envelope includes a payment coupon that specifies a billing account number associated with the customer;

wherein the method further comprises capturing the billing account number from the payment coupon; and

wherein automatically determining whether the check is eligible to be converted into an ACH debit comprises determining, based at least in part on the billing account number and the captured information, whether the check is eligible to be converted into an ACH debit.

4. The method of claim 2, wherein removing the check from the envelope comprises removing the check from the envelope at a site operated by a party other than the customer and other than a party to whom the customer wrote the check.

5. The method of claim 1, wherein automatically determining whether the check is eligible to be converted into an ACH debit comprises determining that the check is not eligible to be converted into an ACH debit when a size of the check is not consistent with a size of a consumer check.

6. The method of claim 1, wherein automatically determining whether the check is eligible to be converted into an ACH debit comprises determining that the check is not eligible to be converted into an ACH debit when a Magnetic Ink Character Recognition (MICR) line of the check has a length that is not consistent with a length of a MICR line of a check that is eligible to be converted into an ACH debit.

7. The method of claim 1, wherein scanning the check to capture information needed to create an ACH debit comprises scanning the check to capture a routing/transfer (R/T) number printed on the check, an account number printed on the check, and a serial number of the check.

8. The method of claim 1, wherein creating the electronic file comprising creating the electronic file such that the electronic file is a National Automated Clearing House Association (NACHA) formatted file.

9. The method of claim 1,

wherein the financial institution is a first financial institution;

and

wherein the method further comprises sending the electronic file to a second financial institution that uses the electronic file to originate an ACH debit.

10. The method of claim 9, wherein the first financial institution and the second financial institution are the same financial institution.

11. The method of claim 1, wherein automatically determining whether the check is eligible to be converted into an ACH debit comprises:

determining that the check is not eligible to be convened into an ACH debit when a R/T number of the check is not active;

determining that the check is not eligible to be converted into an ACH debit when the R/T number of the check is associated with a financial institution that does not participate in ACH transactions; and

determining that the check is not eligible to be converted into an ACH debit when a length of an account number of the check is not valid.

12. The method of claim 1, wherein automatically determining whether the check is eligible to be convened into an ACH debit comprises:

determining whether an account number of the check includes a R/T number of a credit union and a credit union account number;

converting the account number of the check into the R/T number of the credit union and the credit union account number when it is determined that the account number of the check includes the R/T number of the credit union and the credit union account number; and

using the R/T number of the credit union to automatically determine whether the check is eligible to be converted into an ACH debit.

13. The method of claim 1,

wherein the method further comprises storing a table that associates R/T numbers with MICR line parsing formats;

and

wherein automatically determining whether the check is eligible to be converted into an ACH debit comprises;

using the table to identify a MICR line parsing format associated with the R/T number of the check;

identifying a check serial number of the check and an account number of the check by parsing the MICR line of the check using the identified MICR line parsing format; and

using the check serial number and the account number to determine whether the check is eligible to be converted into an ACH debit.

14. The method of claim 1,

wherein automatically determining whether the check is eligible to be converted into an ACH debit comprises executing software that automatically determines whether the check is eligible to be converted into an ACH debit;

and

wherein the method further comprises receiving an upgrade to the software, the upgrade enabling the software to more accurately determine whether checks are eligible to be converted into ACH debits.

15. The method of claim 14, further comprising:

receiving an ACH administrative return associated with the check; and

identifying a change to the software that, if such change had been applied to the software when the software determined that the check was eligible to be converted into a ACH debit, would have determined that the check was not eligible to be converted into an ACH debit,

wherein the upgrade incorporates the change to the software.

16. The method of claim 14, further comprising:

receiving a Notification of Change (NOC) associated with the check; and

identifying a change to the software that, if such change had been applied to the software when the software determined that the check was eligible to be converted into a ACH debit, would have determined that the check was not eligible to be converted into an ACH debit,

wherein the upgrade incorporates the change to the software.

17. The method of claim 1, further comprising destroying the check after a predetermined amount of time has passed after the check was converted into an ACH debit.

18. The method of claim 1, further comprising, prior to depositing the check at the financial institution when it is determined that the check is not eligible to be converted into an ACH debit, power encoding the check.

19. The method of claim 1, further comprising:

receiving an administrative return associated with the check; and

in response to receiving the administrative return, automatically drafting a replacement document that replaces the check.

20. A method for processing checks, the method comprising:

receiving, at an originating depository financial institution (ODFI), an administrative return associated with a check;

in response to receiving the administrative return, automatically determining whether the check is eligible to be converted into an ACH debit by;

determining whether the check is a consumer check drawn against an account associated with a consumer;

determining whether the consumer has been notified that the check will be converted into an ACH debit;

determining whether the check is associated with a financial institution that does not accept ACH transactions;

determining whether the consumer has refused to allow conversion of the check into an ACH debit; and

evaluating a length and a position of a Magnetic Ink Character Recognition (MICR) line of the check to determine whether the check can be converted into an ACH debit;

depositing the check at a financial institution when a determination is made that the check is not a consumer check;

depositing the check at the financial institution when a determination is made that the consumer has not been notified;

depositing the check at the financial institution when a determination is made that the financial institution does not accept ACH transactions;

depositing the check at the financial institution when a determination is made that the consumer does not allow conversion of the check into an ACH debit;

depositing the check at the financial institution when a determination is made that the evaluation of the MICR line indicates that the check cannot be converted into an ACH debit;

automatically converting, at a computing apparatus, the check into an ACH debit when a determination is made that the check is eligible to be converted into an ACH debit because the check is a consumer check, the consumer has been notified that the check will be converted into an ACH debit, the financial institution accepts ACH transactions, the consumer has allowed conversion of the check into an ACH debit, and evaluation of the MICR line indicates that the check can be converted into an ACH debit; and

using the ACH debit to re-present the check.

21. The method of claim 20,

wherein the method further comprises storing a table that associates routing/transfer (R/T) numbers with MICR line parsing formats;

and

wherein automatically determining whether the check is eligible to be converted into an ACH debit comprises;

using the table to identify a MICR line parsing format associated with the R/T number of the check;

identifying a check serial number of the check and an account number, parsing the MICR line of the check using the identified MICR line parsing format; and

using the check serial number and the account number to determine whether the check is eligible to be convened into an ACH debit.

22. A method for processing checks, the method comprising:

receiving a check at a point-of-sale;

in response to receiving the check, extracting information from the check at the point-of-sale;

transmitting the information to a computing device at a remote location that determines whether the check is eligible to be convened into an ACH debit by;

determining whether the check is a consumer check drawn against an account associated with a consumer;

determining whether the consumer has been notified that the check will be convened into an ACH debit;

determining whether the check is associated with a financial institution that does not accept ACH transactions;

determining whether the consumer has refused to allow conversion of the check into an ACH debit; and

evaluating a length and a position of a Magnetic Ink Character Recognition (MICR) line of the check to determine whether the check can be converted into an ACH debit;

receiving, from the remote location, a confirmation when it is determined at the remote location that the check is eligible to be convened into an ACH debit because the check is a consumer check, the consumer has been notified, the financial institution accepts ACH transactions, the consumer allows conversion of the check into an ACH debit, and evaluation of the MICR line indicates that the check can be converted into an ACH debit;

receiving, from the remote location, a rejection when it is determined at the remote location that the check is not a consumer check;

receiving, from the remote location, the rejection when it is determined at the remote location that the consumer has not been notified;

receiving, from the remote location, the rejection when it is determined at the remote location that the financial institution does not accept ACH transactions;

receiving, from the remote location, the rejection when it is determined at the remote location that the consumer does not allow conversion of the check into an ACH debit;

receiving, from the remote location, the rejection when it is determined at the remote location that evaluation of the MICR line indicates that the check cannot be convened into an ACH debit;

converting the check into an ACH debit when the confirmation is received; and

depositing the check when the rejection is received.

23. The method of claim 22, wherein the method further comprises power encoding the check when it is determined at the remote location that the check is not eligible to be convened into an ACH debit.

24. An apparatus for processing checks, the apparatus comprising:

means for receiving an envelope that contains a check drawn against an account associated with a consumer and a billing coupon that specifies a billing account number assigned to the consumer by a biller;

means for extracting the check and the billing coupon from the envelope;

means for scanning the check to capture a Magnetic Ink Character Recognition (MICR) line of the check and an amount of money specified by the check;

means for scanning the billing coupon to capture the billing account number assigned to the consumer by the biller;

means for determining whether a size of the check is consistent with a size of a consumer check;

means for determining whether a length of the MICR line of the check is consistent with a length of a MICR line of a check that is eligible to be converted into an Automated Clearing House (ACH) debit;

means for extracting a routing/transfer (R/T) number from the MICR line of the check;

means for storing a first table that associates R/T numbers with MICR line parsing formats;

means for using the first table to identify a MICR line parsing format associated with the R/T number extracted from the check;

means for identifying a check serial number of the check and an account number of the check by parsing the MICR line of the check using the identified MICR line parsing format;

means for storing a second table that contains a set of R/T numbers that are active;

means for using the second table to determine whether an R/T number of the check is active;

means for storing a third table that contains a set of R/T numbers associated with financial institutions that do not accept ACH transactions;

means for using the third table to determine whether the R/T number of the check is associated with a financial institution that does not accept ACH transactions;

means for storing a fourth table that lists billing account numbers assigned by the biller to consumers who have refused to allow the biller to convert checks into ACH debits;

means for using the fourth table to determine whether the consumer has refused to allow the biller to convert checks into ACH debits;

means for depositing the check at a financial institution when;

1. a determination is made that the size of the check is not consistent with a size of a consumer check

2. a determination is made that the length of the MICR line of the check is not consistent with a length of a MICR line of a check that is eligible to be converted into an ACH debit;

3. a determination is made that the R/T number of the check is not active;

4. a determination is made that the R/T number of the check is associated with a financial institution that does not accept ACH transactions;

or

5. a determination is made that the consumer has refused to allow the biller to convert checks into ACH debits;

means for creating an electronic file that contains the information needed to create an ACH debit at least when;

1. a determination is made that the size of the check is consistent with a size of a consumer check;

2. a determination is made that the length of the MICR line of the check is consistent with a length of a MICR line of a check that is eligible to be converted into an ACH debit;

3. a determination is made that the R/T number of the check is active;

4. a determination is made that the R/T number of the check is associated with a financial institution that does accept ACH transactions; and

5. a determination is made that the consumer has not refused to allow the biller to convert checks into ACH debits;

means for sending the electronic file to an originating depository financial institution that originates an ACH debit based on the electronic file; and

means for receiving upgrades to the first table, the second table, the third table, and the fourth table.