A bad cheque refers to a cheque that cannot be negotiated because it is drawn on a non-existent account or does not have sufficient funds. Writing a bad check, also known as a hot check, is illegal. Under Texas state law, authorities can charge miswriting checks as a Class C offense, Class B offense, Class A offense, or criminal offense. The level of insult people can be exposed to as a result of writing bad cheques depends on factors such as the size of the cheque. For example, people may face Class C theft if they write a wrong cheque for less than $100, a Class B offence for cheques between $100 and $750, a Class A offence for cheques between $750 and $2,500, and a crime for cheques over $2,500. The first thing to do is to contact the person who wrote the check and inform them that it bounced. Don`t assume it was done intentionally because it could be an innocent mistake. Once you contact them, you may be able to try to deposit the check again. If the check still bounces off after that, you may have legal options to get the money back by dragging the clerk to court.
Do I need to send an official complaint letter to the customer? Yes. In Ohio, NSF cheques written for less than $5,000 require that letters of request be sent by registered mail to the United States, with acknowledgement required. See Ohio Revised Code [“R.C.”] 2307.61(A)(2)(b), available at codes.ohio.gov/orc/2307.61 (last accessed March 3, 2021). Your payment request letter must also include an explanation of the circumstances of the NSF audit, as well as five (5) other statements required by law. See R.C. 2307.61(C)(1) to (5). It is important to note that failure to comply with any of these requirements may result in your waiver of the right to recover your collection costs, including your attorneys` fees. If you`re a merchant and your customers write checks with insufficient funds, learn how returned checks work. You will learn what causes the problem, how to solve it, and how to avoid problems in the future. You may not even know you`ve been receiving a bad check for several weeks, at least until the bank notifies you or you verify your account. When a check is returned, the bank will cancel it from your account, so you see a fee for the same amount of the written check. Once you`ve spent the money, you`ll likely end up with an overdraft.
Cheques are essentially a promissory note for money. By writing a cheque, you promise the beneficiary that you have enough money in your account to cover the cheque. If you write a bad one, the bank will reject it because your account doesn`t have enough funds. Cheques don`t tell if you`re spending too much. When you spend with money, you always know what you can afford. But cash is not always safe or convenient. Debit cards are another way to spend money in your checking account, and you can ask your bank to decline purchases that exceed your account. Keep track of how much you have available in your checking account and remember that there is a difference between your account balance and your available balance. It`s easy to find your balance by registering online or checking your bank`s app on your mobile device. SMS requests can also allow for a quick balance update.
This article is published for informational purposes only. It is intended only to provide a very general overview of a particular area of law. Nothing in this article is intended to create an attorney-client relationship or provide legal advice. You should not rely on anything in this article without first consulting a licensed attorney in your jurisdiction. If you have specific questions about your case, please consult a licensed lawyer in your jurisdiction. Learn what can go wrong when you write a check for more than your bank account. And if you`ve ever written a check with insufficient funds, you`ll learn what steps to take next. Before we continue, we make sure that all our readers are on the same page. A “rejected cheque” is an informal way of describing what happens when a cheque cannot be processed because the account of the cheque issuer (the “subscriber”) does not have sufficient funds and, therefore, cannot pay the dollar amount on the cheque (“NSF cheques”); Of course, the drawer`s bank (the “drawee`s” or “payer`s” bank) will not cash an NSF cheque and return it to the person attempting to cash it (the “payee”).
See generally Uniform Commercial Code § 3-103 (Definitions), available at www.law.cornell.edu/ucc/3/3-103 (last accessed March 3, 2021). If you`re bouncing checks, follow these steps to break the habit and limit the consequences. Writing bad checks can cause a variety of problems. You may have to pay significant fees, you may lose the ability to write cheques in the future, you may be in legal trouble, and your credit may suffer. Bad cheques are often written inadvertently by people who simply don`t know their bank balances were too low. Banks and sellers often charge a fee for rejected checks, sometimes exceeding the amount for which the check was issued. The bank usually adds an insufficient funds fee (NSF) to your account, which can be up to $35 for each NSF cheque issued. You may also be responsible for any fees incurred by the beneficiary due to your bad cheque. If you`ve written checks with insufficient funds in the past, it can be difficult to get a bank account. Banks and credit unions work with data providers to track consumer behavior, and these databases can prevent you from opening an account when you need it.
According to the Texas Attorney General`s Office, the possible penalties people can face if they are convicted of writing bad checks depend on the scale of the crime. Individuals convicted of a Class C offence can face a fine of up to $500. The penalty for a Class B offence includes a maximum penalty of 180 days` imprisonment, a fine of up to $2,000, or both. If convicted of Class A theft for writing an NSF cheque, people can face up to one year in jail, a fine of up to $4,000, or both. Keeping up with your finances is now much easier than ever. Online banking can help you avoid NSF cheques. If you access your account, you`ll be able to check the balance more frequently and check if and when the checks you write delete your account. If you use overdraft protection or similar services at your bank, the bank can provide the necessary funds to allow your check to pass. However, you often pay a fee to your bank to advance the money (and you`ll have to pay your bank back).
