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FYI: Beware of Automatic Payroll Deposits
The Ghost of FReepers Past

Posted on 06/14/2005 8:43:07 AM PDT by The Ghost of FReepers Past

Have you signed up with your employer for an automatic payroll deposit? Then be warned. The employer has access to your bank account for 5 days after the deposit is made. Technically, the employer can only debit your account to reverse an error. BUT IN REALITY, he can debit your account for the full amount of your check for any reason he chooses. Revenge. Coercion. Whatever. Your bank won't care; it's not their problem. His bank won't care, or they may fake it and just not call you back. The ACH people won't care. Mid-America Payment Exchange won't care (it's not their problem -- "contact your employer").

Do NOT sign up for this unless you really trust your employer. And then I still wouldn't sign up for it unless they cannot debit your account for ANY reason. If they make an error, they should have to get your authorization FIRST! Don't repeat my mistake.


TOPICS: Business/Economy
KEYWORDS: deception; employment; fraud; payroll; pointless; snakes; theft

1 posted on 06/14/2005 8:43:08 AM PDT by The Ghost of FReepers Past
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To: The Ghost of FReepers Past

I'd rather get paid in gold ingots, but they didn't like that suggestion when I made it.


2 posted on 06/14/2005 8:47:17 AM PDT by Dead Corpse (Never underestimate the will of the downtrodden to lie flatter.)
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To: Dead Corpse

LOL! I'm serious about this. It sounds great and is convenient, but DO NOT agree to let them correct mistakes without your authorization. You are essentially giving them access to your account for the full amount of the deposit.


3 posted on 06/14/2005 8:48:36 AM PDT by The Ghost of FReepers Past (Legislatures are so outdated. If you want real political victory, take your issue to court.)
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To: The Ghost of FReepers Past
BUT IN REALITY, he can debit your account for the full amount of your check for any reason he chooses.

If your employer pays you with a check, he can stop payment on it for any reason he chooses, too.

So, I guess I'm missing your point.

4 posted on 06/14/2005 8:49:13 AM PDT by newgeezer (Pessimists are often right—and are delighted to be proved wrong. --Geo. F. Will)
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To: The Ghost of FReepers Past

What if you work for the bank like I do?


5 posted on 06/14/2005 8:50:28 AM PDT by jtminton ("Dangit, Bobby, people will see that oil stain and think I'm a drunk.")
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To: Dead Corpse

My mother has her SS check automatically depostied. They won't correct errors. They tell her about the error and she must refund it herself. They have no authorization to make debits. That's what you should arrange with your employer. Give them NO RIGHT to make debits so they can't take the money back just because you won't sign a non-compete or something.


6 posted on 06/14/2005 8:51:05 AM PDT by The Ghost of FReepers Past (Legislatures are so outdated. If you want real political victory, take your issue to court.)
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To: The Ghost of FReepers Past

What was the mistake on yours? and if you dont mind my asking, about how much were you screwed out of?


7 posted on 06/14/2005 8:51:40 AM PDT by Zeppelin (Keep on FReepin' on.....)
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To: newgeezer

He can stop payment on a check, yes. But can he go to your bank after the check has cleared and take it back out of your account? That is what I am talking about.


8 posted on 06/14/2005 8:52:09 AM PDT by The Ghost of FReepers Past (Legislatures are so outdated. If you want real political victory, take your issue to court.)
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To: Dead Corpse

one time, i went to take a few thou out of the bank, and they asked "and how would you like that?"

"in pennies".

you shoulda seen the look on her face.

(I finally gave in and took $100s) =P


9 posted on 06/14/2005 8:53:05 AM PDT by Zeppelin (Keep on FReepin' on.....)
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To: The Ghost of FReepers Past

Look,
For me,
It was one of two choices,

a. Auto-deposit.
b. Routinely look my purse and find my payroll check fom 10 days earlier that I had forgotten to deposit. AFTER I'd written and mailed my bills.

It's a no-brainer for folks like me!


10 posted on 06/14/2005 8:54:21 AM PDT by najida (A tagline? How about--- I pulled all the tags off my pillows!)
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To: The Ghost of FReepers Past
But can he go to your bank after the check has cleared and take it back out of your account?

That's exactly what happens if he stops payment on a paper check after you've deposited it in your account. As long as he stops payment before it clears HIS account, you lose, just like the ACH process you're talking about. One is electronic; the other is paper.

11 posted on 06/14/2005 8:56:45 AM PDT by newgeezer (Pessimists are often right—and are delighted to be proved wrong. --Geo. F. Will)
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To: Zeppelin
There wasn't a mistake. I hesitate giving the details so I will tell you about a person I know instead.

This person was told to sign a non-compete agreement or he would not get paid. He signed, but another employee didn't. The employee that didn't sign was told he had two choices: resign or be fired. That was a Thursday. Friday was a payday and the employer decided to just take back his pay of approx $1,500. It was money earned the two weeks prior to the pay week. The employee then met with the employer the following monday and signed a resignation letter. THEN AND ONLY THEN did the employer give the money back.

12 posted on 06/14/2005 8:57:00 AM PDT by The Ghost of FReepers Past (Legislatures are so outdated. If you want real political victory, take your issue to court.)
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To: najida

Okay. I'm just warning you that you need to check what you signed. Be sure that your employer has NO RIGHT to debit your account for any reason whatsoever. Then you should be safe.


13 posted on 06/14/2005 8:58:37 AM PDT by The Ghost of FReepers Past (Legislatures are so outdated. If you want real political victory, take your issue to court.)
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To: newgeezer

Nope. An auto deposit starts out by clearing his account. It goes to his bank FIRST, then to yours. The funds are immediately available to you because they have already cleared his bank.


14 posted on 06/14/2005 8:59:45 AM PDT by The Ghost of FReepers Past (Legislatures are so outdated. If you want real political victory, take your issue to court.)
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To: The Ghost of FReepers Past
BUT IN REALITY, he can debit your account for the full amount of your check for any reason he chooses.

That also applies in this case:

BUT IN REALITY, (your wife) can debit your account for the full amount of your check for any reason (she) chooses.

:)

15 posted on 06/14/2005 9:06:57 AM PDT by jtminton ("Dangit, Bobby, people will see that oil stain and think I'm a drunk.")
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To: newgeezer
A check originates with the writer, goes to the payee's bank first, then it goes to the bank it was drawn on. Of course you can stop a check before it reaches your bank. But cannot stop payment on a check after it has cleared your bank.

ACH payroll transactions are different. They orignate with the signer and clear his bank BEFORE they get to the payee's bank.

Go ahead and give your employer the right to debit your account if you want. It's your risk. I'm just warning you.

16 posted on 06/14/2005 9:07:27 AM PDT by The Ghost of FReepers Past (Legislatures are so outdated. If you want real political victory, take your issue to court.)
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To: jtminton

LOL! Yes, but only if you agreed to a joint account. You probably do not want to have a joint account with your employer.


17 posted on 06/14/2005 9:08:39 AM PDT by The Ghost of FReepers Past (Legislatures are so outdated. If you want real political victory, take your issue to court.)
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To: The Ghost of FReepers Past
And then I still wouldn't sign up for it unless they cannot debit your account for ANY reason.

Nobody is going to agree to this, so if you can't live with that, you're pretty much going to have to do without direct deposit.

18 posted on 06/14/2005 9:09:24 AM PDT by general_re ("Frantic orthodoxy is never rooted in faith, but in doubt." - Reinhold Niebuhr)
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To: general_re

SSA agrees to it. The same rule should apply for employers. The rule should be changed. If a mistake was made they should have to get authorization from the account holder first.


19 posted on 06/14/2005 9:11:07 AM PDT by The Ghost of FReepers Past (Legislatures are so outdated. If you want real political victory, take your issue to court.)
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To: The Ghost of FReepers Past
Nope. An auto deposit starts out by clearing his account. It goes to his bank FIRST, then to yours. The funds are immediately available to you because they have already cleared his bank.

Yes, of course. But, if he were to pay you with a paper check, he has the benefit of having the float time in which to discover and correct (via the stop payment) any mistake he may have made. Do you think employers want to just give up that benefit? Probably not. Therefore, the ACH provides this mechanism to keep them from losing that benefit.

Now, I also recall hearing a few months ago that, since paper checks are now processed electronically, there was some talk of eliminating the paper float; the check would clear the check writer's account when the issuing bank received electronic notification rather than waiting for the paper check to arrive. If that were to happen -- maybe it already did, I don't know -- this 5 days of float would seem to give direct-deposit employers a huge benefit that paper-check-writing employers no longer enjoy.

20 posted on 06/14/2005 9:11:30 AM PDT by newgeezer (Pessimists are often right—and are delighted to be proved wrong. --Geo. F. Will)
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To: The Ghost of FReepers Past

Hell, everybody has access to my account. I have direct deposit but I've worked there for 27 years so I **sort of** trust them.


21 posted on 06/14/2005 9:14:30 AM PDT by subterfuge (Hillary's Operative Cooked the Books! **just keep saying that wherever you go**)
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To: The Ghost of FReepers Past
Go ahead and give your employer the right to debit your account if you want. It's your risk.

I'm just trying to determine whether the risk is any different with direct deposit than with a check.

Of course, if you really want to eliminate the risk, insist on being paid in cash or, as another FReeper suggested, in gold.

22 posted on 06/14/2005 9:15:21 AM PDT by newgeezer (Pessimists are often right—and are delighted to be proved wrong. --Geo. F. Will)
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To: The Ghost of FReepers Past
SSA agrees to it.

The law probably requires them to do so. Meanwhile, in the non-governmental real world, nobody is going to agree to direct deposit if an accidental extra zero on your paycheck means they have to sue you to recover it.

I've been having my salary direct-deposited with a variety of banks and employers for almost twenty years now, and not once have I had a problem where they had to go and recover money from me. You got hit by lightning, basically - it happens, and I'm sorry it happened to you, but let's not get maudlin.

23 posted on 06/14/2005 9:16:26 AM PDT by general_re ("Frantic orthodoxy is never rooted in faith, but in doubt." - Reinhold Niebuhr)
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To: newgeezer
Well, most people are honest and follow the rules. I'm just saying that people should beware. They are giving their employer access to debit their accounts. Some of the forms do not even inform the employee of that (go to Paychex website).

I would also not have a problem if someone was interested in holding employers to the rules. But they shouldn't be allowed to just snatch your money for any manipulative or vengeful reason they choose. The ACH rules are clear that they do not have that right. But try and get someone to care.

24 posted on 06/14/2005 9:16:33 AM PDT by The Ghost of FReepers Past (Legislatures are so outdated. If you want real political victory, take your issue to court.)
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To: general_re

Yes, the rules are supposed to cover only those sorts of situations -- the extra zero, the duplicate, etc. My warning is that in reality, the employer can just take the money for whatever reason he chooses. The employer is protected by exposing the employee to risk. That's not fair, imo. There should be REAL punishment to an employer who breaks the rules.


25 posted on 06/14/2005 9:19:08 AM PDT by The Ghost of FReepers Past (Legislatures are so outdated. If you want real political victory, take your issue to court.)
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To: The Ghost of FReepers Past
My warning is that in reality, the employer can just take the money for whatever reason he chooses.

What's the real difference between that and your employer simply choosing to not pay you at all? As a practical matter, he can decide to not pay you anything this week for whatever reason he chooses, but if it's something stupid, he's probably going to answer for it later.

26 posted on 06/14/2005 9:22:54 AM PDT by general_re ("Frantic orthodoxy is never rooted in faith, but in doubt." - Reinhold Niebuhr)
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To: newgeezer

Let's say I work in payroll and I decide to debit my employer's account a few days early for my pay and just not tell him about it. Would you have a problem with that? Would I have committed a crime?


27 posted on 06/14/2005 9:24:37 AM PDT by The Ghost of FReepers Past (Legislatures are so outdated. If you want real political victory, take your issue to court.)
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To: general_re
No, actually an employer cannot withhold pay for a week. It's against the law. They have to give you the money on the designated payday. But again, if he breaks the rules, good luck finding someone who cares.

So if your employer told you that you must sign a non-compete or you would not receive your already earned pay, you would be fine with that? Or if he got mad at you and decided to debit your account on payday for the full amount of your paycheck, you would be fine with that? What if he then held the money until you signed something else he wanted you to sign? No problem? That's just the way payroll works?

28 posted on 06/14/2005 9:30:22 AM PDT by The Ghost of FReepers Past (Legislatures are so outdated. If you want real political victory, take your issue to court.)
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To: The Ghost of FReepers Past
Let's say I work in payroll and I decide to debit my employer's account a few days early for my pay and just not tell him about it. Would you have a problem with that? Would I have committed a crime?

Okay, if that situation is either relevant or analogous, I'm missing it.

Wasn't it your intent to imply that there's a risk with direct deposit that isn't present with the old-fashioned paper check?

29 posted on 06/14/2005 9:32:09 AM PDT by newgeezer (Pessimists are often right—and are delighted to be proved wrong. --Geo. F. Will)
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To: The Ghost of FReepers Past

I've had automatic direct deposit with all but one employer in my life, without incident. However, regarding the one employer who paid by check, I have had a paycheck returned for insufficient funds.


30 posted on 06/14/2005 9:34:22 AM PDT by flada (Y2K? What are you selling, chicken or sex jelly?)
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To: newgeezer

My point is two-fold. There is a risk with direct deposit. That risk is, you give your employer access to your account for 5 days after payday. I would like access to his account 5 days prior to payday then. It is the same thing. I can't take his money without his consent and he shouldn't be able to take mine. I understand about correcting errors, but in reality, that's just a cover. He can take the money if he WANTS to take the money. Period! The rules are worthless if the employer isn't punished for breaking them. I would be punished if I accessed his account, even if I had limited, authorized access to his account, if my access was in violation of the payroll terms.


31 posted on 06/14/2005 9:41:09 AM PDT by The Ghost of FReepers Past (Legislatures are so outdated. If you want real political victory, take your issue to court.)
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To: flada

Yeah. But Banks go after people who write hot checks. There is justice for that in the end.


32 posted on 06/14/2005 9:43:00 AM PDT by The Ghost of FReepers Past (Legislatures are so outdated. If you want real political victory, take your issue to court.)
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To: The Ghost of FReepers Past

Dunno, I've used direct deposit for over 30 years and never had a problem. I had to correct payments on two occassions, when I got paid for deployments after I had returned (I initiated action in both cases) and both times they just took it out of the next paycheck.


33 posted on 06/14/2005 9:44:36 AM PDT by Lonesome in Massachussets (Deadcheck the embeds first.)
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To: The Ghost of FReepers Past

If I were concerned about my employer possibly debiting my account, I could simply electronically transfer my entire paycheck to a different account. With online banking, I could even set this up to be automated.
I'm not too worried... I'm more valuable to my employer than they are to me (even though they won't admit it).


34 posted on 06/14/2005 9:46:16 AM PDT by flada (Y2K? What are you selling, chicken or sex jelly?)
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To: The Ghost of FReepers Past
No, actually an employer cannot withhold pay for a week. It's against the law. They have to give you the money on the designated payday.

It's not that simple - you're assuming that you're entitled to the money in the first place. If your employer disputes that, they can refuse to pay and put the burden on you to prove otherwise.

So if your employer told you that you must sign a non-compete or you would not receive your already earned pay, you would be fine with that?

Never had it happen. Never seen it happen.

Or if he got mad at you and decided to debit your account on payday for the full amount of your paycheck, you would be fine with that?

Never had it happen. Never seen it happen.

What if he then held the money until you signed something else he wanted you to sign?

Depends on what it is, I guess. Never had it happen to me, nor seen it happen to someone else.

Sounds like your employer wasn't a very nice person. Looks to me like you should have contacted a lawyer to take advantage of the laws that already exist, rather than wasting your time agitating for a law that's specially designed for the oddball edge cases. Sorry this all happened to you, but there's plenty of law out there to help you already.

35 posted on 06/14/2005 9:46:39 AM PDT by general_re ("Frantic orthodoxy is never rooted in faith, but in doubt." - Reinhold Niebuhr)
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To: Lonesome in Massachussets
See, you haven't an authorization problem. Direct deposit is great until your employer violates the terms. Then good luck getting justice.

Actually, justice may be served in the end. I think the person can file a complaint about a rules violation and they have to process it. Laws were broken here. I hope it works out.

36 posted on 06/14/2005 9:47:48 AM PDT by The Ghost of FReepers Past (Legislatures are so outdated. If you want real political victory, take your issue to court.)
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To: The Ghost of FReepers Past

So dangling it over the employees' head just to get their way. That's messed up man.


37 posted on 06/14/2005 9:57:33 AM PDT by Zeppelin (Keep on FReepin' on.....)
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To: Zeppelin
Exactly. Thank you. You're the first person to see that.

Actually, perhaps the banks and the ACH people are the wrong folks to call. Perhaps the District Attorney and the police department are better sources.

38 posted on 06/14/2005 10:07:34 AM PDT by The Ghost of FReepers Past (Legislatures are so outdated. If you want real political victory, take your issue to court.)
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To: The Ghost of FReepers Past
Methinks you are being a teeny bit paranoid. Perhaps you have seen this happen to someone, and that makes you wary. I understand that.

But for what it's worth, in all my years in banking, I never ever saw this happen.

39 posted on 06/14/2005 10:18:04 AM PDT by teenyelliott (Soylent green should be made outta liberals...)
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To: teenyelliott

If someone steals your ATM card and starts using it, you want justice. If someone steals your checkbook and starts forging checks, you want justice. If an employer takes your pay right out of your checking account -- unauthorized -- you are fine with that?


40 posted on 06/14/2005 10:31:58 AM PDT by The Ghost of FReepers Past (Legislatures are so outdated. If you want real political victory, take your issue to court.)
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To: newgeezer

""If your employer pays you with a check, he can stop payment on it for any reason he chooses, too.""

Hmmmmm......In Florida it is illegal for an employer to put a stop on an employees check.

What state are you in?


41 posted on 06/14/2005 10:41:44 AM PDT by jsh3180
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To: The Ghost of FReepers Past
If an employer takes your pay right out of your checking account -- unauthorized -- you are fine with that?

You must have some type of comprehension problem. No one is saying it's "fine" to have an employer "take back" a direct deposited paycheck or to hold it "hostage" to coerce an employee to sign something.

Direct deposit is not the culprit here, it is the employer. Both things you describe sound to be actionable at least under civil, if not criminal law.

SD

42 posted on 06/14/2005 10:45:09 AM PDT by SoothingDave
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To: The Ghost of FReepers Past
If an employer takes your pay right out of your checking account -- unauthorized -- you are fine with that?

Of course not. I never said any such thing.

All I said was that I never saw anything like that happen. I simply do not think it is a common occurrence.

I have seen many people who had gotten paid with a hot check, though. And there is absolutely no recourse for them, short of suing the employer.

43 posted on 06/14/2005 10:50:03 AM PDT by teenyelliott (Soylent green should be made outta liberals...)
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To: The Ghost of FReepers Past
Direct deposit is great until your employer violates the terms.

Driving is great until you have a wreck.

This is much more likely to happen and be much more significant, so should we quit driving too?

44 posted on 06/14/2005 11:34:01 AM PDT by Eaker (Festive camaraderie and adrenaline addiction, with weapons and lots of ammo, leads to no good.)
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To: jsh3180
My point has been and remains that there appears to be little if any additional risk with direct deposit over a paper check.

If it is in fact legal for an employer to reverse a direct deposit and illegal for him to stop payment on a paper paycheck -- nevermind that "for any reason he chooses" garbage -- it would seem legislators have some catching up to do.

45 posted on 06/14/2005 11:54:03 AM PDT by newgeezer (Pessimists are often right—and are delighted to be proved wrong. --Geo. F. Will)
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To: The Ghost of FReepers Past
There is a risk with direct deposit. That risk is, you give your employer access to your account for 5 days after payday. I would like access to his account 5 days prior to payday then. It is the same thing.

No, it isn't. He can only take back the money he put into your account. If you were to start putting direct deposits into his account, you'd probably have "access to his account" for 5 days hence, too. And, to the extent either of you steals what rightfully belongs to the other, the legal system awaits.

{sigh} Your original post said, "Do NOT sign up for this unless you really trust your employer."

So, let's say I don't "really trust" my employer. Should I feel better if I'm paid with a paper check?

46 posted on 06/14/2005 12:04:50 PM PDT by newgeezer (Pessimists are often right—and are delighted to be proved wrong. --Geo. F. Will)
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To: newgeezer
You're sounding very sensible today. Maybe I better go lie down. ;-)

SD

47 posted on 06/14/2005 12:14:22 PM PDT by SoothingDave
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