Returned Checks and Electronic Checks, ACH and EFTs
When a check is returned by the bank for any reason, Banking and Merchant Services (BMS) will process a deposit reversal for the amount of the check and forward the returned check to the appropriate department. A returned check fee should be assessed by the department and payment to satisfy must be in the form of a cashier’s check or money order.
Each department will establish and maintain procedures for the collection of returned checks to include, but not be limited to, those outlined in this directive. The University Controller must approve any exceptions.
Reason for Directive
To comply with University of Florida Regulation 3.0022, Bill Paying, Returned Check and Electronic Transfer Items Service Charges.
Who Must Comply?
All University departments.
- The bank will notify BMS of a returned check
- BMS will process a deposit reversal for the check amount and forward the returned check to that department
- When a payment is returned, the following returned check fee must be assessed by the department per UF Regulation 3.0022:
- $25 if the payment is $50 or less
- $30 if the payment is greater than $50 but less than $300
- $40 if the payment is greater than $300
- Payment to satisfy the returned check amount and applicable returned check fee must be in the form of a cashier’s check or money order
- Personal check, credit card, or debit card will not be accepted
- If the electronic check/ACH/EFTis returned due to an unintentional processing error by the payer, such as entering an incorrect bank account number, the following return payment fee should be assessed:
- No fee if the payment is less than $10
- $10 if the electronic check/ACH/EFT payment of $10 or more was returned
The payment to satisfy in this situation is not required to be in the form of a cashier’s check or money order.
Student Returned Items
Payments for tuition or non-tuition charges
If the returned payment was to pay student tuition or non-tuition charges in the Student Financial System (SFS) review the steps in the Bursar Returned Payments for more information.
Payments for other charges
If the returned payment was from a student for charges other than tuition or non-tuition charges in the SFS, BMS will reverse the accounting entry and return the check to the department. In this case the department will either:
- Place the total debt (returned payment amount and the returned payment fee) in the SFS, or
- Begin collection activities itself
For all departments choosing to begin collection activities themselves, it is the responsibility of the department to begin collection activities immediately. If the department does not place the steps in the SFS, the steps below in “Collection Activities” should be followed.
Each department will establish and maintain procedures for the collection of returned checks to include, but not be limited to, those outlined below. The University Controller must approve any exception to this directive.
- Send a certified letter of notification to the issuer of the returned check within (7) days of the department’s receipt of the returned check
- The certified letter will include notification of the assessment of a returned check fee, based on the amounts above, and demand immediate payment by cashier’s check or money order
- If the department’s collection efforts have failed:
- Non-employees: Sent to an external billing service and collection agency if the returned check and returned check fee total greater than $100 (collection cost may be assessed as well)
- Employees: Bursar will help you begin the Payroll Deduction Set-Off procedures for university employees for any amount of the returned check. Contact the Bursar, Collections Unit at 352-392-0766 for questions and assistance
- If the total check, including returned check fee, is less than $100, and collection activities are unsuccessful, then the department should include the check in the Annual Bad Debt Write-Off
Last reviewed on 01/24/2024
Banking & Merchant Services: (352) 392-9057
Bursar Collections Unit: (352) 392-0766