Lost Donation

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ffrsqpilot
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Lost Donation

#1

Post by ffrsqpilot »

One of the units in our stake has been working with CHQ to resolve a deposit that appears to have been lost this past January. It turns out that the bank (in this case, Wells Fargo) has lost the deposit. Through working with CHQ, the bank, and checking with members who made deposits in that donation batch that the following has happened:
1. The Branch has all the paperwork showing they made the deposit
2. The Bank can't find the deposit.
3. The Bank admits that they did indeed receive the deposit but does not know where it went
4. Members who made donations via checks have not had their checks clear yet.

The response from CHQ is as follows: "the bank has "provisionally credited the unit with the deposit. Wells Fargo can't find the deposit, but they know they have received it, so they are giving us credit until further notice. The bank never usually comes back and reverses those, so I am counting this taken care of."

Now my question - is this indeed really taken care of? In this case I am concerned for the members whose checks have not cleared.

As the stake clerk, I discussed this with both the Branch President and with the Stake President this last week after receiving this email. Neither the Branch President nor the Stake President are sure what to do about the uncleared checks for the members. So I wonder if any of you have dealt with this sort of situation and what you might suggest as to what to do to help the members. The individual members could choose to cancel the check since it hasn't cleared by now - but that most likely will cause them to pay a "stop payment" fee which is normally around $20. I'd hate to see that happen as it was through no fault of the Church or their own that the checks were lost. So, do they just sit tight and wait and see if the checks finally clear (meaning the bank found the deposit), or would any of you suggest another option?

I'm open to any suggestions so that I can help the members, the Branch President, and the Stake President if there are complications that arise.

Jim
jdlessley
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#2

Post by jdlessley »

Banks do not have to honor or cash checks with an issue date more than six months old. You did not mention if the bank for the donor has been contacted. Taking the situation to the donors bank is the next step I would take. They may elect not to charge the cancellation fee for a check that is over 6 months of age.
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russellhltn
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#3

Post by russellhltn »

Pilotfly wrote: The response from CHQ is as follows: "the bank has "provisionally credited the unit with the deposit. Wells Fargo can't find the deposit, but they know they have received it, so they are giving us credit until further notice. The bank never usually comes back and reverses those, so I am counting this taken care of."
Sounds like "not my problem". And from the church's viewpoint, he's probably right. However, I'd send another email to CHQ and ask them about the problem from the member's viewpoint.

At this point the members get to benefit from a bank error. If the check does suddenly go though, then it was money they owed anyway - although I think that possibility becomes more remote with time. I don't think individuals are required to go though the escheatment process, so I don't know as it's any burden to them. ;)

I suspect that any attempt at fixing this by replacing the checks is just going to create problems.
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nbllds-p40
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#4

Post by nbllds-p40 »

I had a similar question recently. A ward member contacted me saying that the bank and only cashed their check for X dollars, when it should have been for Y dollars (Y was greater than X). I checked our records, and everything indicated Y dollars (correct amount). The member went back to the bank, and the bank told them to just include the discrepant amount (Y-X) in their next donation. It didn't seem like that was much of a solution to me, particularly since there would be a discrepancy between what the church records show for donations paid and actual money removed from the member's bank account. Maybe the bank figured it wasn't worth its time to further investigate the issue?

Anyway, years ago I heard that a ward in our stake had the same issue you mention (bank lost deposit). Some time later during a building remodel, the bank found that the deposit had dropped down into the wall. Not sure what was done to resolve the issue - I'll ask around and reply again if there is anything interesting.
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ffrsqpilot
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#5

Post by ffrsqpilot »

Thanks for the responses so far. I knew that after a certain amount of time that banks do not (or don't have to) honor checks that are older than a given time frame. Just couldn't remember what the time frame was. If that is the case, then the member has some actions to take I would think. Even though the bank in this case (Wells Fargo) appears to make good on the deposit total, the individual who donated via check isn't actually out any funds. So, did the member donate or not would be the question?

This could get interesting. Perhaps the best way to handle this is for the unit to delete the donation via the bank and Church headquarters which would be an interesting process to watch - especially if part of the donation was in cash and part with checks.

As I look at this from the church's viewpoint - the donation funds are accounted for although the bank can't find the funds. From the bank's viewpoint, all they have to do is pony up the required funds to meet the donation amount. From the unit's viewpoint, the donation is accounted for (no pun intended) and they really shouldn't have to do anything else. However, from the members viewpoint the situation remains that they made a donation that will not show up in their checking account and being honest tithe payers they can now do one of two things:
1. Cancel the check which would then cause problems with the original donation batch getting unit, bank, church involved.
or
2. Make another donation to include the funds originally donated in the lost deposit. Then the individual gets credit for an extra donation which isn't right either but hopefully the members involved are worthy members and will only take credit for what they actually donated.

As to nbllds' situation where the bank cashed the check for an amount different than what the donator and unit thought - that isn't all that unique. What happens is a different numerical amount is written in the space for numerals and the script amount is written for a different amount. Banks always cash the check for the amount that shows in the written script. We just went through this with one of our units when they closed out their end of year tithing and donation report. One member wrote $5550.00 numerically but in script wrote out Five thousand five hundred and 50/100 which the bank read as $5500.50. We eventually figured out what happened and got it all straightened out. I am willing to bet (if I were a betting person :D ) that is what occurred with the situation nbllds described. What the bank said was probably right in their viewpoint but the unit finance clerk will eventually have to straighten out the difference - probably when the church sends the Bishop a letter that there is a disparity.

In anycase, if any of you figure out which is the best tack to take with the dilema of the lost checks please let me know. I want to save the clerk and Branch president as much headache as possible.

Jim
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#6

Post by russellhltn »

Pilotfly wrote:However, from the members viewpoint the situation remains that they made a donation that will not show up in their checking account and being honest tithe payers they can now do one of two things:
1. Cancel the check which would then cause problems with the original donation batch getting unit, bank, church involved.
or
2. Make another donation to include the funds originally donated in the lost deposit. Then the individual gets credit for an extra donation which isn't right either but hopefully the members involved are worthy members and will only take credit for what they actually donated.
In my personal opinion, I think the honest thing to do is give the money to the bank. They're the ones who lost it - not the church. The church already has the money. If the bank doesn't want it, try harder - there must be a charity they give money to. (Since it's the bank's money - let them decide on the charity.)

Options 1 and 2 above is trying to make the church the beneficiary of the bank's error. I don't see that as much better than letting the member keep it (as long as they pay tithing on the found money. ;))
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jdlessley
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#7

Post by jdlessley »

Pilotfly wrote:So, did the member donate or not would be the question?
In my opinion they did not - or not until the donor's bank shows the money transfered (check cashed). The member is still in possession of the funds. The transaction has not been completed.
Pilotfly wrote:This could get interesting. Perhaps the best way to handle this is for the unit to delete the donation via the bank and Church headquarters which would be an interesting process to watch - especially if part of the donation was in cash and part with checks.
There is still time before the end of the year, but definitely before the tax valid statement is provided to the member, to get the issue resolved. The process mentioned here is part of how I see to handle it. The additional part is for the member to cancel the check through their bank. Of course the check cancellation fee has to be worked out. Perhaps the bank that lost the check could reimburse for the check canellation fee.
Pilotfly wrote:However, from the members viewpoint the situation remains that they made a donation that will not show up in their checking account and being honest tithe payers they can now do one of two things:
1. Cancel the check which would then cause problems with the original donation batch getting unit, bank, church involved.
or
2. Make another donation to include the funds originally donated in the lost deposit.
To me options 1 & 2 are not mutally exclusive. The two together appears to be how it should be handled before the end of the year. Before this however, I would allow the bank time to find the check and to complete the transaction (debiting the donors checking account). While option 1 part of the solution may create work for the unit, the bank, and the Church, I think it would be the appropriate action to take.

The bank that lost the check has options available to them to complete the transaction without the check that is provided for in several banking laws. One of those laws is The Check Clearing for the 21st Century Act (Check 21). All the bank needs is the check number and the amount of the check. There is more to it but I know this can be done. Check 21 would protect the donor in the event the bank that lost the check finds it and tries to charge the donor's account a second time for the same check number.
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lajackson
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#8

Post by lajackson »

RussellHltn wrote:I suspect that any attempt at fixing this by replacing the checks is just going to create problems.
You are correct. Let the bank guide the way in resolving this issue.

As a donor, I would (hopefully) have noticed that my check from January did not clear, and asked the clerk about it. The clerk would have told me that the bank had misplaced the deposit and was trying to find it.

I then would have told the clerk to let me know if the bank needed a replacement check and I would provide one. At that point, my financial responsibility is done.

As for the actual paying of a full tithing, I have several choices. But, if the deposit is never found and the bank covers the shortage, the records for the year will always be different if I decide to replace the amount in addition to what the bank has done. It will be the real life version of the Monopoly "Bank error in your favor" card from Chance or Community Chest.

Priesthood leaders will have to cite D&C 119:4 and then be quiet. Members will have to decide what their increase is, and pay tithing accordingly, deciding along the way how to handle a situation where someone else pays some of their tithing for them. An interesting conundrum, isn't it?
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