When a check bounces, the bank will reverse it from your account, so you'll see a debit for the same amount of the written check. If you've spent the money, you'll probably end up with an overdraft. The first thing to do is contact the person who wrote the check and inform them it bounced. Don't assume it was done on purpose because it may be an innocent mistake.
Once you've contacted them, you may be able to try to deposit the check again. If the check still bounces after that, you may have legal recourse to recover the funds by taking the writer to court.
Adding overdraft protection will help prevent accidental overspending and bounced checks. If you receive a bad check, contact the person who wrote it and determine why it was returned. Sometimes mistakes happen, but make sure it isn't a common occurrence, and of course, willingly writing bad checks is illegal. If you write a bad check unintentionally, contact the recipient and your bank immediately to pay any fees caused by the bad check and what you owe.
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Key Takeaways A bad check refers to a check that cannot be negotiated because it is drawn on a nonexistent account or one that has insufficient funds. Woodstock Institute. Center for Responsible Lending. Checking Accounts. Credit Cards. Actively scan device characteristics for identification. Use precise geolocation data. Select personalised content. Create a personalised content profile.
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Using a Debit Card. Best Checking Accounts. Business Checking Accounts. Table of Contents Expand. What NSFs? Overdraft vs. NSF Fees. Criticism of NSF Fees. The Bottom Line. The acronym NSF also describes the fee charged when a check is presented but cannot be covered by the balance in the account. NSF fees are slightly different from overdraft fees, which apply when a bank accepts checks that overdraw checking accounts.
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Related Terms How Overdraft Provides Protection An overdraft occurs when there isn't enough money in an account for a transaction or withdrawal, but the bank covers the transaction anyway. Good people occasionally make mistakes, and giving your customer a call, and letting him know what happened often can solve the problem. Let the customer know the amount of the check, as well as any fee you need to pay your bank.
The oversight will embarrass many people, and they will make good on the check. Send a certified letter with a return receipt demanding payment if you don't know the person and can't make contact by telephone. Certify the letter so you're sure the letter was received. You will also have proof that you sent the letter should you need to take legal action in the future.
As a last resort, hand over the bad check to the local police agency. Knowingly writing a bad check with intent to commit fraud is a crime.
Consider involving police if you can't reach the person who wrote the check after repeated tries or receive no response to your calls and letters within a reasonable amount of time. Inform the check writer of your intent to contact authorities.
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