We don’t always have the cash on hand. However, what if we have to pay someone with money that is unsafe to handle? Being robbed is a constant worry. Cheque payments are the most effective solution to such issues.
Cheques can be used to transmit money directly to a recipient’s account or to pay a person, organization, or other party. However, using checks to send or receive money might occasionally come with risks and additional fees. Make sure your check won’t bounce before receiving or making payment. The bounced check may put both the payer and the recipient in danger.
The article will give you details about bounced checks, including how much they will cost you, how to avoid them, and what to do if you accidentally bounced a check.
To learn more about bounced checks and how to solve the issues listed above, read the complete article.
THE GUIDE FOR BOUNCED CHEQUES Let’s first establish a clear understanding of what a bounced check is before moving on to the right advice regarding them. It is a check that the bank has dishonored or rejected for a variety of reasons. There may not be enough money in the account, a stale check, or an invalid signature.
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Everything You Need to Know About Inventory Storage Costs: Video Explanation NOT ENOUGH FUNDS Insufficient funds or a negative balance in the account are the main causes of bank checks bouncing back. When the payer has signed for more than the remaining balance on his account, this circumstance could occur.
IRRELEVANT SIGNIFICANCE The bank will undoubtedly return your check if your signature does not match the sample signatures you submitted when opening your account. Nowadays, the majority of people utilize digital signatures, making it challenging to obtain signatures that were created five to seven years ago. When signing a check, you must be precise with your signatures.
THE CHEQUE’S DATE The date on the check needs to be precise. The dates may cause checks to bounce for one of two possible causes.
The first is if you failed to include the date on the check. Depending on the steps taken by your bank, your cheque may be canceled or returned in this situation for mentioning the date.
The check’s expiration presents the second scenario in this situation. Normally, a check is only good for three months. For instance, if a check is signed on March 19, 2021, it will expire on June 19, 2021. Your check will be returned unpaid in this scenario. You must once more obtain a signed check bearing the most recent date.
DRAFTING ON A CHEQUE Your check must be well worded, that is, it must be easy to read and understand. Avoid adding the name or amount to the signature more than once. The bank will bounce the check because all of these actions are viewed as fraud by the bank.
DEFECTIVE CHEQUE If the check is ripped or the writing is unclear, the bank will not accept it. The check you are about to present should have the correct date, name, amount, and signature, all in legible handwriting and in the proper order.
COLD ACCOUNT You may be hearing this term for the first time because it is not frequently used. So allow me to explain what a frozen account is. If the government instructs the bank to freeze a specific person’s account, the bank will do so. If the person who committed the money scam is the subject of a criminal investigation, this could occur. The check written on such an account will undoubtedly bounce.
A BOUNCED CHECQUE WILL COST YOU HOW MUCH? You could incur penalties if your check bounces. You will be in trouble if your check bounces for one of the aforementioned reasons. The actions listed below may be conducted against you.
A Sanction From The Bank The bank has the complete right to impose a fine for defrauding the bank if your check bounces because of insufficient funds, a mismatched signature, or any of the other reasons indicated above. Various banks may have different penalty fees.
If you used a bad check to pay off your loan, the bank will assess a penalty called a late fee.
THE CREDIT HISTORY IS HURT. Damage to the bank credit will undoubtedly result from bounced checks or dishonored checks. Let me remind you that the bank always checks your credit history before granting you a loan.
Always strive to have more money in your account than the check you are signing in order to avoid such issues.
CONVICTION CHARGES If the defendant is found guilty and it is established that he intentionally issued the bounced checks, the court may prosecute him if he refuses to pay the fees associated with the bounced checks. The court may sentence you to prison time or impose fines equal to twice the amount of the bad check.
CONCLUSION Next time you are about to sign a check, be careful. You must be aware of the balance on your account and avoid overwriting it. Now that hopefully all of your questions have been answered, please contact us. We’ll be watching for your comments.
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