B-70055, MAY 8, 1963

B-70055: May 8, 1963

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VETERANS ADMINISTRATION: FURTHER REFERENCE IS MADE TO YOUR LETTER OF FEBRUARY 18. WHEREIN DUE TO ADMINISTRATIVE ERROR ARISING FROM SIMILARITY OF NAMES CHECKS HAVE BEEN MISDIRECTED. THE MODIFICATION NOW PROPOSED IS PRIMARILY THE ELIMINATION OF THE CONDITIONS: "THE DEBTOR (THE WRONGFUL PAYEE) ACKNOWLEDGED THE RECEIPT OF THE PROCEEDS OF THE CHECK.'. YOU FURTHER STATE: "IT IS HIGHLY DESIRABLE THAT ALL INTENDED PAYEES BE TREATED ALIKE WHERE THE IMPROPER PAYMENT WAS DUE TO ADMINISTRATIVE ERROR AND THE RIGHTFUL PAYEE WAS WITHOUT FAULT IN THE MISDIRECTION OF THE CHECK. THE PAYMENT IS STILL DUE THE RIGHTFUL PAYEE. "B. THE MISDIRECTION OF THE CHECK WAS DUE TO ADMINISTRATIVE ERROR. "C. THE RIGHTFUL PAYEE WAS WITHOUT FAULT IN THE MISDIRECTION OF THE CHECK.'.

B-70055, MAY 8, 1963

TO THE ADMINISTRATOR, VETERANS ADMINISTRATION:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF FEBRUARY 18, 1963, REQUESTING OUR CONCURRENCE IN A PROPOSED MODIFICATION OF THE CONDITIONS FOR THE PAYMENT BY THE VETERANS ADMINISTRATION, WITHOUT PRIOR REFERRAL TO OUR OFFICE, OF THE RIGHTFUL PAYEE IN "SAME OR SIMILAR NAME" CHECK CASES, WHEREIN DUE TO ADMINISTRATIVE ERROR ARISING FROM SIMILARITY OF NAMES CHECKS HAVE BEEN MISDIRECTED.

IN OUR LETTER OF SEPTEMBER 12, 1958 (B-70055), TO THE THEN ADMINISTRATOR OF VETERANS AFFAIRS, WE APPROVED THE ISSUANCE BY THE VETERANS ADMINISTRATION, UNDER CERTAIN CONDITIONS, OF A SECOND CHECK TO THE RIGHTFUL PAYEE IN "SAME OR SIMILAR NAME" CHECK SITUATIONS. THE MODIFICATION NOW PROPOSED IS PRIMARILY THE ELIMINATION OF THE CONDITIONS: "THE DEBTOR (THE WRONGFUL PAYEE) ACKNOWLEDGED THE RECEIPT OF THE PROCEEDS OF THE CHECK.' YOUR LETTER EXPLAINS THAT THE REQUIREMENT FREQUENTLY RESULTS IN EXTENDED DELAY IN PAYING THE RIGHTFUL PAYEE. YOU FURTHER STATE:

"IT IS HIGHLY DESIRABLE THAT ALL INTENDED PAYEES BE TREATED ALIKE WHERE THE IMPROPER PAYMENT WAS DUE TO ADMINISTRATIVE ERROR AND THE RIGHTFUL PAYEE WAS WITHOUT FAULT IN THE MISDIRECTION OF THE CHECK. WE FEEL THAT THE RIGHTFUL PAYEE ALSO SHOULD BE PAID PROMPTLY, NOTWITHSTANDING THE INABILITY TO OBTAIN REFUND OR ACKNOWLEDGMENT FROM THE WRONGFUL PAYEE.'

YOU THEREFORE PROPOSE AND REQUEST OUR APPROVAL FOR THE PAYMENT TO THE RIGHTFUL PAYEE BY THE VETERANS ADMINISTRATION, WITHOUT PRIOR REFERRAL TO OUR OFFICE, WHENEVER THE FOLLOWING CONDITIONS EXIST IN "SAME OR SIMILAR NAME" CHECK SITUATIONS:

"A. THE PAYMENT IS STILL DUE THE RIGHTFUL PAYEE.

"B. THE MISDIRECTION OF THE CHECK WAS DUE TO ADMINISTRATIVE ERROR.

"C. THE RIGHTFUL PAYEE WAS WITHOUT FAULT IN THE MISDIRECTION OF THE CHECK.'

WE HAVE NO OBJECTION TO THE PROPOSED MODIFICATION REGARDING THE CONDITIONS IN WHICH THE VETERANS ADMINISTRATION, WITHOUT PRIOR REFERRAL TO OUR OFFICE, MAY MAKE PAYMENT TO THE RIGHTFUL PAYEE IN "SAME OR SIMILAR NAME" CHECK CASES. AND AS WE UNDERSTAND, BASED UPON INFORMAL DISCUSSIONS BETWEEN PERSONNEL OF THE VETERANS ADMINISTRATION AND THIS OFFICE, THAT ADEQUATE PROCEDURES AND REGULATIONS WILL BE ADMINISTRATIVELY PROMULGATED FOR THE CONTROL OF SUCH PAYMENTS AND THE RECOVERY OF THE PROCEEDS OF MISDIRECTED CHECKS, THE PROPOSED MODIFICATION IS APPROVED.