Uncle Sam wants US to go checkless

One way to cut down on the number of lost and stolen checks is to stop using checks altogether.

The federal government, in paying out everything from salaries to retirement benefits, is finding that claims of lost or stolen checks are diminishing as it increasingly skips the check step. Washington's alternative payment plan is to transfer the funds directly to recipients' individual bank accounts.

Such direct deposits, of course, are made only when the payee voluntarily agrees. But the Treasury Department has promoted an intensive, four-year campaign to extol the advantages of checkless payments. And, so far, nearly one-third of those receiving monthly federal payments, including 11 million social security recipients, are choosing to go checkless.

Though the payment method is widely known as the electronic funds transfer (ETF) system, Treasury promoters try hard to avoid using such technical terminology lest potential subscribers be put off.

''A lot of people want to see and handle that check,'' explains Donna Jackson , marketing director of the Treasury's direct deposit program. ''They don't realize that computers are here and safe. A computer printed up the very check which many of them see as much more secure.''

As federal authorities tell it, the streamlining of the payment system reduces not only the number of checks that somehow go astray, but also cuts the overall costs to taxpayers and banks of preparing, mailing, and cashing the payments. Last year, $28 million in operational costs (or an average of 21 cents an item) was saved, according to Treasury tallies.

Instead of using the mails, Washington sends magnetic tapes with individual payment records by the existing courier system to regional Federal Reserve Banks. From the regional banks, the tapes are transferred directly to local banks and the deposit is registered in individual accounts. The hope is that one day the entire process can be carried out electronically.

Under the traditional check and mail system, Washington has averaged one claim (missing, forged, etc.) for every 600 checks. With the direct deposit system, Donna Jackson says, there has only been one claim for every 4,500 payments.

''The beauty of this system is that we can trace every payment - we've never lost one,'' she says.

''It saves us a considerable amount of money and we find it's a very reliable system,'' agrees Bill Andersen of the Treasury's division of disbursement. He says Washington could save an estimated $65 million a year if everyone on social security agreed to go checkless. ''This is definitely the payment mechanism of the future.''

Still, Mr. Andersen stresses that the government has no intention of mandating acceptance of the idea.

''We just try to encourage people by enclosing inserts with their checks,'' he says