Tuesday, May 2, 2006

What Happens When You Incur Costs From Someone Giving You a Bad Check?

A bad check is one that, for a variety of reasons, does not allow the person cashing it to withdraw money from the bank of the person who wrote the check. This situation can leave the check casher incurring various costs in numerous ways. For example, a bank may charge the casher a bounced check. In such a case, you have several ways of obtaining reimbursement.

Fees

    Banks will generally charge the check casher a fee if the cash does not clear. According to the financial reference website Bankrate.com, using numbers provided by the Federal Reserve in 2000, the average returned check fee at banks was $6.28 and $7.65 at savings associations. Since then, fees have risen, meaning that if you are unlucky enough to be stuck with a bad check, you might end up paying out upwards of $10.

Requesting Payment

    If you're charged for a bad check, the best course of action is to contact the person who gave you the check and ask to pay the fee assessed to you. Have the bank that returned the check issue you a statement of the fee in writing and present it the issuer of the bad check.

Legal Action

    Because the fees incurred from a bad check are usually relatively small, filing a claim in court for damages, even small claims court, is generally not cost-effective. However, if the check's failure to clear caused other financial problems for you, or if the check issuer passed you a number of bad checks, it may make sense to bring a case against him. If he refuses to make good on the bad check, you may already be considering legal action.

Calling the Bank

    Some banks are willing to waive fees incurred from bad checks, particularly if the person cashing the check has a good relationship with the bank and does not regularly try to cash bad checks. To get the bank to waive the fee, call the bank and politely explain to them the situation. Then ask outright whether they would consider waiving the fee for you.

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