Insufficient Funds Check Recovery

Unfortunately, school districts occasionally receive checks that are returned due to insufficient funds. The Federal Automated Recovery Systems (FARS) helps educational organizations successfully recover funds.

FARS is a subsidiary of the Infinity Business Group of Companies and is governed by the National Automated Clearing House Association, as are banks. It helps schools recover checks that are returned NSF (not sufficient funds) or are otherwise dishonored by the bank. Click here to view the brochure (pdf format – Adobe Acrobat Reader required).

ASBA endorses this program and encourages school districts to participate.

How often will my district be billed?
You are never billed for NSF checks recovered electronically. The check writer pays the NSF check fee as allowed by state law.

For checks that cannot be collected electronically due to age of check (over 6 months old), closed account or stop payment, FARS will initiate “hard collections” on your behalf. Because this process is complicated and costly. FARS will forward 75 percent of the face amount of the check to your district, keeping 25 percent to defer costs.

When does my district receive the collected money?
All NSF checks collected are paid daily (FARS reimburses each business day after holding funds for seven days as required by law). FARS cannot guarantee when or if a check will be collected. Experience shows collection of up to 85 percent of received checks. This collection rate varies by organization.

For more information, contact Paulette Walker by email or by calling (800) 482-1212.