Our bank provided us with information to assist in understanding the bill payment process. Customers submit payments via their bank’s website and assume the payment is electronic or is sent the same day they enter the payment online. CMI does not accept electronic payments from bill pay vendors, therefore, the bank has to mail a paper check to our lockbox processing center.
A realistic timeline for bill payments is below:
- The payment is scheduled by the customer.
- Many banks withdraw the funds from the customer’s bank account on the day the payment is requested.
- The issuing bank prepares a check to be mailed to our lockbox location in Los Angeles.
- Often banks use a third party processer for this service.
- Often banks postdate the check with the date the payment is expected to be received.
- The paper checks are then mailed from a central office, often bundled with other customer’s checks.
- In many cases, the checks are mailed after the funds were withdrawn from the client’s account.
- Banks cannot guarantee postal delivery times.
Our bank conducted research for CMI in 2012 in response to customer concerns about how long it took CMI to receive their bill pay checks. They documented that several Bill Pay Vendors bundle checks with various payment dates and send them in all one package. An example of this is stated below:
- Our Lockbox processing center received on Bill Pay package with included checks dated January 2- January 10. The checks were for customers in several different communities managed by the same management company. Our lockbox facility received this package on Friday January 13.
Above shows how a bill payment scheduled for the 2nd can be received on the 13th. If the association fees were due on the 1st and late after the 10th, those customers would have received a late fee. Customers scheduling their bill payments to arrive at the end of the grace period should be aware of the risk of receiving late fees for payments received after the grace period due to the delays caused by bill pay or the postal service.
Our bank recommends that bill pay users schedule their payments with sufficient lead time (perhaps as much as 10 days before the due date) to allow for any delivery delays. This means if your payment is due on the first, we recommend you schedule your bill payment around the 20th of each month for the next month to avoid delays. Our bank also recommends that customers monitor bill pay items and contact their issuing bank if they experience delays. The customer needs to understand that just because the bank states the money was withdrawn from their account, doesn’t mean the check was mailed or received yet.