Checks, while a traditional form of payment, can sometimes be returned by the bank due to various reasons. This can cause inconvenience and delays for both the payer (issuer) and the payee (receiver). To ensure smooth financial transactions, it’s crucial to understand the reasons behind returned checks and how to address them effectively.
Thankfully, the banking system utilizes specific codes to explain why a check was rejected. Reason 37 is one such code, and this guide delves into its meaning, potential causes, and solutions.
Demystifying Reason 37: Inconsistency in Check Information
A check returned with reason 37 indicates an inconsistency in the information presented during processing. This inconsistency can take several forms:
1. Discrepancy between written amount and numerical value
For instance, the written amount (“Two thousand five hundred reais”) doesn’t match the numerical value ($2,500). This mismatch in currency or amount triggers a return for reason 37.
2. Errors in printing critical data
Smudged printing, missing information, or typos in essential details like account numbers or routing numbers can lead to return for reason 37.
3. Incorrect check coding
Certain pre-printed checks require specific coding for processing. Errors in this coding can also trigger a reason 37 return.
These inconsistencies prevent the smooth and secure processing of the check, prompting the bank to return it.
The Importance of Reason 37
While a bounced check due to reason 37 can be frustrating, it’s important to understand the vital role it plays in safeguarding financial transactions. Think of it as a silent guardian within the banking system.
Inconsistencies flagged by reason 37 often point to simple mistakes. Maybe you accidentally wrote the wrong amount on the check, or a typo snuck into the account number. By identifying these errors, the bank prevents the wrong amount from being withdrawn or deposited, protecting your hard-earned money.
Reason 37 can also act as a red flag for potential fraud attempts. Imagine a scenario where someone steals your checkbook and tries to cash a check with a mismatched name or a suspicious coding alteration.
The inconsistency would trigger a reason 37 return, alerting the bank and potentially stopping the fraudulent transaction in its tracks.
Accurate and reliable financial transactions are the foundation of a healthy banking system. Reason 37 helps to ensure this by catching inconsistencies that could erode trust. By prioritizing accuracy, the bank fosters a secure environment for you to conduct your financial business.
Returned Check for Reason 37? Here’s What to Do
If you receive a check returned for reason 37, don’t panic! Here’s a step-by-step approach to resolving the issue:
1. Meticulous Review
Carefully examine the entire check for any inconsistencies. Verify that the written amount matches the numerical amount, the date is correct and not post-dated, and all fields are filled out clearly and accurately.
This includes the payee’s name, account number, and bank routing number. Also, check for any smudges, tears, or other damage that might prevent the bank from processing the check.
2. Issuing a Corrected Check
If you identify an error during your review, void the returned check. Then, write a new check with the corrected information. Before issuing the new check, double-check everything to avoid another return.
3. Seeking Help from Your Bank
If you can’t pinpoint the problem yourself, contact your bank’s customer service department. Explain the situation and provide the reason code (37) if available. Bank personnel can investigate the issue and provide specific details about the reason for rejection. They can also guide you on how to rectify the error and reissue the check.
4. Transparency with the Payee
Keep the payee informed about the returned check and the steps you’re taking to resolve the issue. Clear communication is essential for maintaining a positive business relationship.
5. Embrace Electronic Payments
Explore alternative payment methods like bank transfers or mobile banking applications. These methods are less prone to errors associated with traditional checks and offer greater convenience and security.
Reason 37: Not Just an Inconvenience
While the inconvenience of a bounced check is undeniable, understanding the bigger picture is key. Reason 37 serves as a silent guardian, working behind the scenes to protect both you and your bank from errors and potential fraud. The next time you encounter a reason 37 return, remember – it’s not just a technicality; it’s a crucial safety net within the financial system.
