People usually take a returned check (NSF) lightly but it is an unlawful act that can sometimes even attract civil or criminal penalties. In a civil penalty the total amount that has to be paid back to the recipient along with any fee or charges that he or she suffered are decided. However, in case of a criminal penalty your bounced check could be taken as an attempt to defraud a company or a person and you could be taken to the court for it. But such a thing would only happen if you do not pay the bounced check amount to the recipient in time.
Generally when a person’s check gets bounced he tries to pay the recipient as soon as possible which is the right thing to do. This not only helps you keep a good relationship with that person or company it also saves you from the consequences that bounced checks can have. Apart from fee that the bank would charge you for the bad check, you also end up getting a blot on your financial history with the bank. This can prevents you from getting various benefits that the banks can provide you with like an overdraft, credit card or even a loan.
When banks decide whether a financial product should be offered to you or not, they go through your entire banking history with them and sometimes even the ones that you have had with other financial institution, before they come to a conclusion. People who have maintained their accounts well and have not had a lot of returned checks or non sufficient funds are more likely to benefit from the bank’s services. Even the limit that you are offered on the overdraft, credit card or a loan can vary depending on your credit history.
There are times when you give someone a post dated check and realize that you have to cancel the check because of an emergency where you might need the money that is in your account for some other purpose. If you are aware of the fact that the check would be presented by the recipient soon, you should make sure that you inform the company or that person about it so that you and also the recipient do not get charged for a returned check. Stop payment option is widely used by people who are dissatisfied about a product or service that they had paid for.
Sometimes a check that is given to you by someone can even bounce because the account that it was issued on has been closed. In this case before filing any criminal charge against the person who gave you the check, you should make sure that you know when the account was closed. If it was closed before the check was written it can be pursued as a criminal offence. However, if it was closed after the check was written, it could also mean that you did not cash the check on time. In the latter case this will become a civil matter rather than a criminal one.