Bank’s Bill Pay Services: As Reliable as Advertised?
The on-line bill pay services offered by many banks promise a convenient, quick, and secure way to pay bills. However, if customers need to provide proof of payments in court, especially with specifics such as the time the payments were made, the bank may well not stand behind their system to provide verification.
The bill pay websites will not admit this. Chase, for example, provides a “guarantee” that payments will be sent on a “Send On date” specified by the customer and promises to cover late fees incurred by any delay if the payee information is entered correctly.
Likewise, US Bank guarantees that bills will be paid on time – that is, that they will be delivered by the date selected by the customer.
The fine print, of course, substantially limits banks’ liability. For example, Chase disclaims responsibility for any error made by the payee, or even a non-negligent “change to a delivery method that increases the processing time for your payments.”
Payment records in any form, whether a check, account statement, or on-line bill payment record, are subject to a hearsay objection in court. Hearsay is inadmissible in as evidence in court unless an exception applies. The rule against hearsay includes written statements.
A record of an online bill payment is classic hearsay: a written statement made out of court, offered to prove the truth of the matter asserted: that is the date, amount, and fact of the payment in question.
The Rules of Evidence provide an exception for business records. Without getting too deep into the weeds, the Business records exception requires that the offered record be made at the time of the transaction and kept in the ordinary course of business, and that these facts be verified by a person with knowledge. The verification can be in the form of an affidavit, so it is not necessary to haul bank employees into court to verify every bank record produced.
Online bill pay records, like paper checks or account statements, are indisputably business records. Litigators who plan ahead should have few issues getting the payment records admitted.
The problem arises with proving the date of delivery of the payment. For a paper check, the cancelled check will show what date the check was deposited into the recipient’s account, proving definitively the latest date the check could have been received. Unfortunately some on-line bill pay systems do not provide similar verification of the date of payment. Often the date on an account statement showing the removal of funds from the payers account is only the date the payment was sent, not the date of delivery. Bank employees for such banks called to testify will refuse to stand behind any supposed guarantee of delivery date on a bank’s website. For an electronic transfer, it is likely that the money was received by the recipient the same day it was removed from the payer’s account (although the bank’s websites do not promise this). For paper checks issued by an online bill pay system, however, there is no reliable way to show the date such checks were cashed.
There is some variation among banks and between payment methods. Chase’s site is silent date of payment issues. Bank of America and U.S. Bank state on their websites that paper checks are withdrawn from accounts on the date they are cashed. However, a representation on a website is likely inadmissible in court, and it is anyone’s guess what bank representatives will testify to when called to stand behind their company’s stated policies.
The bottom line: if you need to prove a payment was delivered on or before a certain date, it is best not to rely on a bank’s records. The old saw applies: if you want something done right, do it yourself – in this case, for important payments, choose a delivery method with delivery verification, or hand deliver the payment.