Understanding what’s a voided check and the value it offers is important. When a check is void, it doesn’t offer any monetary value. Instead, it offers value in the form of verification. This type of item validates a person or business has a legitimate bank account through a real bank. The reason it is requested is to reduce the risk of fraud.
What is void going to offer? The voided check shows the bank routing information and the checking account number for the owner of it. Such information can be used to set up direct deposit for payroll. It can be used to set up payments to come out of that checking account automatically each month for an agreed upon amount.
Fraud has to be fought on all levels, and that is why a voided check is often requested to set up any type of funds coming into or out of a checking account automatically. Without such verification, there is no proof the account is for that person or they have given permission for the funds to be handled in such a manner.
The routing number identifies the bank, credit union, or other entity the account is located with. The routing number is the same for everyone that does business at that particular branch. The account number is different for everyone. If you have more than one account, each will have unique identifying numbers. They may have the same routing information but different account information to distinguish them.
How does it Work?
When a voided check is required to set up a payment or to set up payroll, the owner of the account writes VOID in large letters across the check. They don’t fill out any other information and they don’t have to sign it. Make sure you’re writing on the voided check doesn’t cover up any part of the routing or checking account numbers. If it does, they won’t be able to use it.
There is often other paperwork required that the voided check pertains to. This paperwork explains the use of the voided check and that account. The paperwork has to be signed by both parties. It should include the purpose of the voided check and the terms of the agreement. For payroll, it will be valid until the owner requests funds to go to a different account or they no longer work for that entity.
When the voided check is used for a payment arrangement, it is valid until the established number of payments is complete. For some payments such as vehicle insurance, the end date is open. It ends when the person canceled that policy.
The voided check ensures the information given for that account isn’t fraudulent. For a person or business to obtain printed checks they have to verify identity and other details. They have to work through a valid bank or other entity authorized to offer banking services. The voided check is an additional layer of protection to verify all of this has already been reviewed.
The voided check also cuts down on data entry mistakes. With the physical check in front of them, those that enter and check such information can verify it is all accurate. A number missing or numbers transposed in the routing or the account number can cause funds to go into or be taken out of the wrong account. It has to all be verified to prevent such errors.
For your Records
Since a voided check doesn’t get processed through your bank account, keep a copy of it for your records. You can scan the image before you give it to the provider requesting it or you can take a picture with your phone. It is a good idea to write down the check number in your register for the checking account. Otherwise, you may think you still have an outstanding check somewhere when you reconcile your monthly statement.
Voided Check for Other Situations
There could be other situations when a check is voided too. For example, if you send in a check to pay a bill and the amount is wrong, they may contact you. They may ask you to provide a new check to them. If you have to mail it in, ask them to write VOID across the first check and send you an image of it. This ensures they can’t cash both that check and the new one you send to them.
You can also ask them to mail back that voided check, but is always a good idea to get a visual copy of it before replacing it. For a business account, a check that has a mistake on it may be voided but still kept in the account documents. This is verification the check wasn’t lost, stolen, or part of a fraud scenario in-house.
What if you don’t have a Checking Account?
The use of paper checks is significantly lower now than it has ever been. The convenience of using debit cards or online bill paying has replaced them. If you don’t have a checking account, you aren’t left out in the cold when you need one. Talk to the requestor and see what else they will accept.
You may have deposit slips that allow you to put funds into your account. The information on them is the same as a checking account. This ensures the deposited funds go to the correct account. They may accept that instead of a voided check. If they will only accept a voided check, you will need to set up such an account with a bank.
They will give you some starter checks, but not providers won’t accept that for a void purpose. If that is their policy, you have to wait until you receive the checks with your printed name and other details on the top of them. It can take a few weeks after you open such an account to receive those printed checks.
Some providers will accept copies of bank statements to verify your checking account information. They will require a letter from the bank on official letterhead to verify your bank routing information and your bank account information. They may have a stipulation that the bank account has to be open for at least one year before they will accept this as verification.