Check hold times violating federal law?

[JaredWillis]

Has anyone else experienced long check hold times AND have been a long term customer? 

I believe Square is illegally abusing a loophole in federal law and intentionally holding checks longer than they should in order to punish and inflict pain on small businesses for using services that don’t make Square money. Square makes a majority of their money from POS and invoice transactions and none from depositing checks so it would make sense from a business standpoint to encourage POS and invoicing while discouraging the acceptance of checks. While that is a hostile attitude to its own customers, it is not illegal. However, I believe they have pushed things over the line of ethical and legal behavior. It seems that they could possibly be fraudulently exploiting a loophole in the law that allows you to hold a checks longer than for 6 business days (instead of 2, with some made available next day) if the bank suspects fraud. By simply flagging everything as potential fraud, you inflict massive pain on small businesses that are cash flow sensitive and drive them towards your more profitable services. If this is true, they need to be held accountable. 

What are your experiences with check holds? And if there’s been any held for more than 2 days and/or not had a partial amount made available to you have you filed a complaint with state and federal regulators? Which ones? And what was the result?

[Candlestore]

@JaredWillis ;

The check that is being held is this for an unusally higher amount than you normally receive?  When I sell in person most of my sales range from $11.65 to $300.00 or so.  My check I get from Wholesale customers are in the amounts of $2500 or more.  I deposit my checks in my business account locally.  When we first started taking checks my local banks would put holds on these funds also for longer periods of time, untill the wholesale checks showed from repeat customers.  I did not use Square Banking because I can not write a check on their account to pay some of my expense accounts that did not accept credit cards when I started.    My point here is I am not sure how you would justify or prove Square holding your Checks unjustly if they informed you and said they do this for fraud protection with Fraud and scams always on the rise.

[FCGLLC]

I’m having issues with square as well and I do believe you are correct in your accusations. It’s been an on going battle with square every I get a bigger check. I’m in the lawn care and landscape business so when one of my mowing customers needs landscaping done naturally they have to write me a bigger check. To do their projects I require 50% down payment so we can purchase materials and start the job on time. This most recent check deposit was for $1200 for materials to start the job this week. It is now Monday night and I deposited the check last Wednesday morning. With this hold I now can’t complete this job on time. And here is where I believe your accusations to be true. I have contacted our customer tonight to let them know about the delay. They informed me that square took the money out of their account the same day I deposited it and has been cleared. So why is there still no availability of those funds??!! So now not only are we going to be delayed on this job, the trust I have with my customer is in jeopardy because they think I have their money. But of course I don’t and square has their money. It baffles me how this is legal and if I had the money to pursue square legally I absolutely would. All I can do is write statements to state and federal offices and hope I don’t lose too many customers because square wants to be douche canoes. If anyone is going to legally pursue square I’d be more then happy to write a statement and show proof of their wrongdoings. 

[Advkote]

They stopped placing holds on my checks 18 months ago.  Then last month they started placing holds again.  I went one step further and confirmed the issuing bank of the check I deposited has been fully negotiated and paid.  That means they are sitting in the funds for multiple business days to make money on interest.  They’re not doing it to inflict paint their doing it to make money.  

[swiftbalze]

I understand your frustration — long check hold times can seriously impact cash flow for small businesses. For anyone needing more clarity on related legal and procedural matters, you might find it helpful to explore a reliable resource like Maryland court search for accurate and up-to-date information. This resource provides detailed insights that can help in addressing concerns and understanding your rights. It’s worth checking to see if similar issues have been documented.

[Roobin]

That’s an interesting point you’ve raised about potential violations. It might be useful to also consider how documented timelines and official scheduling records come into play. For anyone wanting a clearer perspective, resources such as Bexar Court Calendar can provide valuable insights into how court timelines are structured. This can help in understanding whether delays may cross into non-compliance.

[Sidney_Tremblay]

That’s an interesting point about federal law and how it applies to hold times. Many students face similar confusion when tracking academic requirements, which reminds me that having clear systems for academic progress is equally important. You can even explore tools like Semester grade points to better understand how results are calculated and managed, ensuring there’s less confusion in the long run.