Bounce Basics: How to Deal with a Bad Check?

If you are a business owner, chances are you need to accept check payments from customers and clients. Now, when you process a significant number of checks in a month, there will be a few that get returned by the bank. While it is frustrating trying to deal with a bad check, there is no need to raise an alarm. Dealing with bounced checks is very much a part and parcel of business operations. If you follow the right steps and keep calm you will resolve the problem.

Apart from insufficient funds, checks can be returned by a bank due to a host of other reasons. Banks may a return check following a signature mismatch or if the check paper doesn’t match their security requirements. This is why, if you plan to order checks online for business, it’s recommended to buy it from a reputed firm. Following are 6 simple steps you need to follow to deal with a bounced check.

Contact the Customer: Just because the check got returned doesn’t mean the person who wrote the check did it intentionally. If you are dealing with an ethical person, he or she would probably take the effort to pay you in cash or transfer the fund electronically. In most case, the person requests the recipient to redeposit the check at a certain date.

Try and Deposit the Check Again: If the person is unresponsive, then it’s best to wait for a few days and then redeposit the check. Sometimes checks get cleared on the second try because it gives the check writers enough time to sufficiently fund their accounts.

Call up the Bank: If you fail on the second attempt, there is no point in keeping on going back to the bank. Now, you need to prepare yourself for taking legal action. Before you send a certified letter, give it one last try by contacting the bank. Tell them that you hold a check for a certain amount and request them to verify if the account is sufficiently funded. If the account has enough money, make your way to the bank and cash the check.

Send a Letter: Now, that all attempts of cashing the check have failed, it’s time to follow the legal course of action. Send the recipient a certified letter to legally inform him that the check has been returned by the bank and you are still awaiting to receive your due. There is no need to be creative, there are plenty of online letter templates for returned checks you can print them out and add your details.

Prepare to Press Charges: You can either contact the local district attorney’s office or hire a legal firm. Sending a letter notifying the bounced check is a prerequisite before you take this step. This is why ensure you send the person who wrote the check a certified letter first.

Sue in Court: Follow the legal procedure to file a suit. Returned check cases are usually pretty straight forward and you should be able to recover the amount due plus damages.