91:
to honour a cheque that will result in an account becoming overdrawn, but a payment on one occasion does not bind the bank to do so again on another occasion. A bank cannot partially pay on a cheque, so that it must either pay a cheque in full or dishonour it. If a bank declines to pay a cheque, it must promptly return the cheque to the person who deposited it or presented it to be cashed. In general, a bank can only pay out of the account on which it was drawn, and cannot draw on any other account that the customer may have at the bank, unless expressly instructed to the contrary.
373:. The check drawer will be responsible to cover the amount of the check, plus all fees to which the recipient is legally entitled, plus a program fee. The drawer will also be required to take a course designed to improve check-writing habits. These programs are controversial and in recent years have come under fire in lawsuits. Normally, if check writer can cover up their bad credits in sixty days, all charges will be dropped.
256:, the original check is not returned to the depositor, but instead the substitute check will be marked "not sufficient funds" and returned to the depositor. The recipient may choose not to accept checks in the future from the writer (typically recorded on a paper or electronic "Do not accept checks from..." list), or may suspend the check-writer's privileges until the check-writer has made good on the debt.
20:
154:
87:, such cheques are typically returned endorsed "Refer to drawer", an instruction to contact the person issuing the cheque for an explanation as to why it was not paid. If there are funds in an account, but insufficient cleared funds, the cheque is normally endorsed “Present again”, by which time the funds should have cleared.
272:
In some cases the issuance of a NSF check may result in criminal prosecution of the drawer of the check. Criminal charges are more likely where the drawer can be shown to have issued the check knowing that it would not be honored. Charges are also more likely when the NSF check is for a large amount,
218:
When a cheque is dishonoured, the bank customer may be charged a dishonour fee by their bank. If paying the cheque would result in the account becoming overdrawn, the bank may in its discretion still honour the cheque. In this situation, the bank may charge an overdraft establishment fee, in addition
90:
When more than one cheque is presented for payment on the same day, and the payment of both would result in the account becoming overdrawn (or below some approved credit limit), the bank has a discretion as to which cheque to pay and which to dishonour. A bank has a general discretion whether or not
222:
If a cheque is dishonoured for any reason, the bank on which it is drawn must promptly return the cheque to the depositor's (payee's) bank, which will ultimately return it to the depositor. The depositor's bank will debit the amount of the cheque from the depositor's account into which it had been
393:
after returning a cheque incorrectly endorsed "insufficient funds"; the court ruled that, as there were sufficient funds, the statement was demonstrably false and damaging to the reputation of the person issuing the cheque. Even with the use of this revised endorsement, the mere implication that
380:
involved in the issuance of the check. In some U.S. states, if the check drawer informs the party they are uttering the check to that it will not clear at the current time (such as asking someone to "hold" a check for a few days), if the check bounces, they can still be sued for the value of the
214:
If a bank receives a cheque that it would normally dishonour, such as there being insufficient funds in an account on which it is drawn, the manager may as a courtesy contact the customer to advise them of the situation to allow them to rectify the situation promptly to avoid a cheque being
235:
Among the consequences of issuing a NSF cheque are actions by financial institutions, civil liability to the drawee, and possible criminal penalties. When a bad cheque is negotiated, the recipient of the cheque may choose to take action against the drawer. The action that is taken may be a
381:
check, but warning the recipient before acceptance that the check will not clear immediately negates the element of fraud and prevents criminal prosecution. For similar reasons, a post-dated check will not normally support a conviction for issuing a NSF check.
226:
Depending on the reason for a cheque being dishonoured, the depositor may determine whether to re-submit the cheque, hoping it will be paid on a second attempt, or else proceed immediately with collection activities, civil or criminal.
259:
The recipient may also choose to report the writer to a database service. This may lead to other merchants in the future refusing to accept checks from the writer or a joint account holder, or the writer having trouble obtaining a
369:'s office, regardless of the amount. An agency run by the district attorney will pursue the drawer of the check by attempting to collect the funds in exchange for avoiding
264:
at another bank. If a merchant or other place of business receives too many bad checks from customers, it may simply decide to not accept any checks at all from anyone.
47:) being the most common, indicating that there are insufficient cleared funds in the account on which the cheque was drawn. An NSF check may be referred to as a
711:
120:
The account does not actually exist, either due to a false cheque being presented, an error in writing the account number, or the account being closed.
648:
132:
The signature on the cheque does not match the signature on file of the account holder or an authorised signatory on the account, or has touched the
596:
353:
Until
January 2013, a bounced check was a criminal offense in the United Arab Emirates that led to imprisonment of the person who wrote it.
500:
175:
285:
Carrying a higher balance in the checking account; that is to always have a "buffer" amount just in case an unexpected check does clear
766:
530:
133:
333:
on the drawer of a dishonoured cheque. The payee may sue the drawer on the cheque itself, who may not have been the original debtor.
201:
704:
342:
39:
on which it is drawn declines to pay (“honour”). There are a number of reasons why a bank might refuse to honour a cheque, with
389:
In
England and Wales, the use of the endorsement "refer to drawer" has become standard after a bank was successfully sued for
447:
179:
787:
736:
403:
362:
620:
697:
581:
164:
679:
341:
In India, a bounced check is a criminal offense, punishable by fines, jail term, or both under
Section 138 of the
183:
168:
394:
funds were insufficient has been held to be libelous in other cases of banks mistakenly refusing to pay cheques.
470:
244:
charges, depending on the amount of the cheque and the laws in the jurisdiction where the cheque is drawn.
237:
123:
The cheque has expired, is cashed before the date on the cheque, or the date on the cheque is erroneous.
100:
215:
dishonoured. The bank is not obliged to contact the customer, and is unlikely to do so more than once.
756:
370:
508:
376:
In some jurisdictions, for a criminal prosecution on a bad check there must be some element of
443:
366:
80:
23:
Sign at DC Public library indicating that a returned check will be subject to a fee of US$ 65.
731:
330:
261:
253:
683:
625:
295:
303:
781:
553:
107:
There are insufficient cleared funds in the account to cover the value of the cheque.
746:
741:
567:
241:
111:
19:
75:. Lost or bounced checks result in late payments and affect the relationship with
437:
126:
There is a discrepancy in the amounts written in numbers and the amount in words.
751:
413:
408:
365:
exists that allows recipients of bad checks to collect the funds from the local
299:
153:
761:
291:
84:
110:
The account holder has instructed the bank not to pay the cheque (called a
281:
Steps that can be taken to reduce the likelihood of a bad check include:
76:
676:
325:
219:
to interest at the overdraft rate until the account is back in credit.
686:. Explains the laws pertaining to bad checks in all fifty U.S. states.
689:
32:
582:"The legal consequences with bounced cheques! - Yahho India Finance"
390:
377:
18:
36:
693:
147:
252:
If the dishonored check has been scanned and replaced by a
501:"DA explains consequences of writing bad checks in Gallup"
309:
Using a credit card, debit card, or cash instead of checks
568:"THE NEGOTIABLE INSTRUMENTS ACT, 1881 ACT NO. 26 OF 1881"
649:"Cheques and free speech get bounced - Aktas v. Westpac"
298:
from which funds will be automatically transferred, a
294:
protection – This may be in the form of a link to a
273:or where the drawer issues multiple NSF checks.
442:. Kluwer Law International, 2010. p. 129.
597:"UAE stops jailing expats for bounced cheques"
361:In many jurisdictions in the United States, a
705:
8:
117:The account holder's funds have been frozen.
182:. Unsourced material may be challenged and
712:
698:
690:
240:collection action or lawsuit, or seeking
202:Learn how and when to remove this message
425:
129:The cheque is scribbled or overwritten.
621:"Bounced cheques yield libel damages"
223:deposited, as well as a service fee.
7:
431:
429:
180:adding citations to reliable sources
306:designed specially for this purpose
767:Shared Check Authorization Network
647:Ackland, Richard (6 August 2010).
231:Consequences of insufficient funds
16:Cheque that a bank declines to pay
14:
343:Negotiable Instruments Act, 1881
152:
99:Cheques may be dishonoured by a
471:"Anatomy of a Substitute Check"
595:Clancy, Rebecca (2013-01-01).
1:
737:Bad check restitution program
404:Bad check restitution program
363:bad check restitution program
677:National Check Fraud Center
499:Wood, Leslie (2005-06-29).
288:Better balancing techniques
804:
31:(also spelled check) is a
727:
533:. Hall County, Georgia
139:The cheque is damaged.
24:
653:Sydney Morning Herald
531:"Bad Check Questions"
478:Federal Reserve Banks
268:Criminal consequences
101:financial institution
95:Reasons for dishonour
22:
788:Non-sufficient funds
757:Non-sufficient funds
371:criminal prosecution
349:United Arab Emirates
176:improve this section
136:strip on the cheque.
41:non-sufficient funds
439:Tort Law in Ireland
436:Ward, Paul (2010).
721:Dishonoured cheque
682:2020-11-12 at the
551:Section 70 of the
248:Civil consequences
29:dishonoured cheque
25:
775:
774:
367:district attorney
212:
211:
204:
81:England and Wales
795:
732:Advance-fee scam
714:
707:
700:
691:
664:
663:
661:
659:
644:
638:
637:
635:
634:
617:
611:
610:
608:
607:
592:
586:
585:
578:
572:
571:
564:
558:
554:Cheques Act 1986
549:
543:
542:
540:
538:
526:
520:
519:
517:
516:
511:on 22 April 2008
507:. Archived from
496:
490:
489:
487:
485:
475:
467:
461:
460:
458:
456:
433:
331:strict liability
326:Cheques Act 1986
262:checking account
254:substitute check
207:
200:
196:
193:
187:
156:
148:
53:dishonored check
803:
802:
798:
797:
796:
794:
793:
792:
778:
777:
776:
771:
723:
718:
684:Wayback Machine
673:
668:
667:
657:
655:
646:
645:
641:
632:
630:
626:The Independent
619:
618:
614:
605:
603:
594:
593:
589:
580:
579:
575:
566:
565:
561:
550:
546:
536:
534:
529:
527:
523:
514:
512:
498:
497:
493:
483:
481:
473:
469:
468:
464:
454:
452:
450:
435:
434:
427:
422:
400:
387:
359:
351:
339:
321:
316:
296:savings account
279:
270:
250:
233:
208:
197:
191:
188:
173:
157:
146:
97:
17:
12:
11:
5:
801:
799:
791:
790:
780:
779:
773:
772:
770:
769:
764:
759:
754:
749:
744:
739:
734:
728:
725:
724:
719:
717:
716:
709:
702:
694:
688:
687:
672:
671:External links
669:
666:
665:
639:
629:. 21 July 1992
612:
587:
573:
559:
544:
521:
491:
462:
448:
424:
423:
421:
418:
417:
416:
411:
406:
399:
396:
386:
385:United Kingdom
383:
358:
355:
350:
347:
338:
335:
329:(Cth) imposes
320:
317:
315:
312:
311:
310:
307:
304:line of credit
289:
286:
278:
275:
269:
266:
249:
246:
232:
229:
210:
209:
160:
158:
151:
145:
142:
141:
140:
137:
130:
127:
124:
121:
118:
115:
112:stopped cheque
108:
96:
93:
15:
13:
10:
9:
6:
4:
3:
2:
800:
789:
786:
785:
783:
768:
765:
763:
760:
758:
755:
753:
750:
748:
745:
743:
740:
738:
735:
733:
730:
729:
726:
722:
715:
710:
708:
703:
701:
696:
695:
692:
685:
681:
678:
675:
674:
670:
654:
650:
643:
640:
628:
627:
622:
616:
613:
602:
601:The Telegraph
598:
591:
588:
583:
577:
574:
569:
563:
560:
556:
555:
548:
545:
532:
525:
522:
510:
506:
502:
495:
492:
479:
472:
466:
463:
451:
445:
441:
440:
432:
430:
426:
419:
415:
412:
410:
407:
405:
402:
401:
397:
395:
392:
384:
382:
379:
374:
372:
368:
364:
357:United States
356:
354:
348:
346:
344:
336:
334:
332:
328:
327:
318:
313:
308:
305:
301:
297:
293:
290:
287:
284:
283:
282:
276:
274:
267:
265:
263:
257:
255:
247:
245:
243:
239:
230:
228:
224:
220:
216:
206:
203:
195:
185:
181:
177:
171:
170:
166:
161:This section
159:
155:
150:
149:
143:
138:
135:
131:
128:
125:
122:
119:
116:
113:
109:
106:
105:
104:
102:
94:
92:
88:
86:
82:
78:
74:
70:
69:returned item
66:
62:
58:
57:bounced check
54:
50:
46:
42:
38:
34:
30:
21:
747:Check kiting
742:Cheque fraud
720:
656:. Retrieved
652:
642:
631:. Retrieved
624:
615:
604:. Retrieved
600:
590:
576:
562:
552:
547:
535:. Retrieved
524:
513:. Retrieved
509:the original
504:
494:
484:29 September
482:. Retrieved
477:
465:
455:29 September
453:. Retrieved
438:
388:
375:
360:
352:
340:
324:
322:
314:Legal issues
280:
271:
258:
251:
234:
225:
221:
217:
213:
198:
189:
174:Please help
162:
98:
89:
72:
68:
65:rubber check
64:
60:
56:
52:
48:
44:
40:
28:
26:
752:ChexSystems
528:See, e.g.,
505:Independent
414:ChexSystems
409:Check fraud
300:credit card
633:2009-09-24
606:2013-05-22
537:28 January
515:2008-05-09
449:9041133321
420:References
277:Prevention
61:cold check
762:Overdraft
319:Australia
292:Overdraft
163:does not
103:because:
85:Australia
77:customers
73:hot check
49:bad check
35:that the
782:Category
680:Archived
398:See also
242:criminal
192:May 2021
658:13 June
570:. 1881.
302:, or a
184:removed
169:sources
144:Process
480:. 2004
446:
33:cheque
474:(PDF)
391:libel
378:fraud
337:India
238:civil
79:. In
71:, or
660:2014
539:2019
486:2017
457:2017
444:ISBN
323:The
167:any
165:cite
134:MICR
83:and
37:bank
178:by
45:NSF
784::
651:.
623:.
599:.
503:.
476:.
428:^
345:.
114:).
67:,
63:,
59:,
55:,
51:,
27:A
713:e
706:t
699:v
662:.
636:.
609:.
584:.
557:.
541:.
518:.
488:.
459:.
205:)
199:(
194:)
190:(
186:.
172:.
43:(
Text is available under the Creative Commons Attribution-ShareAlike License. Additional terms may apply.
