I recently bounced a check, accidentally. But this got me to thinking:people go to jail for writing bad checks. Yet most of the time, the banks are content to charge $29 and let it slide. I suppose intent is somehow suspected (writing $1000 in checks in two days, for example).
For purpose of debate, here’s a list of situations where someone intentionally writes bad checks. At what level would you as the bank seek to prosecute and why? (For all situations, the person’s paycheck is automatically deposited on Thursday. Also, if checks are submitted to a bank on Thursday, the deposit is credited first, then the checks subtracted.)
[ol]
[li]A man needs $10 worth of food on Wednesday. He has only $5 in his checking. He writes a check, knowing that it won’t be presented to the bank until Friday.[/li][li]On Wednesday, a woman realizes she has $200 in outstanding checks, but only $160 in her account. The outstanding checks will probably be presented on Wednesday business. She writes a check at a supermarket that allows up to $50 over for change on checks. She then goes to her bank and deposits the $50 so that her balance now says $210. (Since she deposited cash, those funds are instantly available.)[/li][li]Wednesday again. A man realizes his outstanding checks are $90 more than what he has on balance. He has a checking account at another bank, but with just a few dollars in it. He writes a check to himself from the 2nd account and deposits it via ATM to the first. He does the same from the 1st account to his 2nd account. (Both banks credit ATM deposits a maximum of $100 until the deposits clear.) Now his busier account has enough funds on deposit.[/li][li]A woman needs $300 cash for a trip she’s taking starting first thing Thursday. Her account is near empty. But her paycheck funds won’t be available until after nightly processing, that is, on Friday. On Tuesday and Wednesday she writes checks for $50 over at 3 different stores (3 stores x 2 days x $50 = $300), knowing that the Tuesday checks won’t be processed until Thursday.[/li][li]Similar situation as #2, except that it’s Monday when the shortfall is realized. She does the scheme on Monday, then again on Wednesday to cover Monday’s check.[/li][li]Following #6: She discovers she’s $170 short on Saturday. On Saturday and Sunday, she writes four checks for $50 over. On Monday she deposits the cash. Then on Monday, Tuesday, and Wednesday, she does the same scheme, writing 2 $50 overs each day. But she’s not sure when the weekend checks will clear, so she’s still in “danger” of bouncing.[/li][/ol]
well, if you’re asking at which point does prosecution generally come into play, each jurisdiction has varying rules etc. but in general
most of those presented would not generate a prosecution, in my experience. the folks I know who’ve gotten prosecuted for bad checks did the following (and if you didn’t know, I’ve worked with felons for 20+ years, so know a whole lot of folks who’ve gotten prosecuted)
Wrote/forged a check on some one else’s account. Trust me, that WON’T get forgiven.
Changed a check written by some one else to them. (you wrote a check for seven dollars, they added a zero to make it 70)
you wrote checks off of a closed account.
A woman I know was prosecuted after she deposited in an ATM, her “check stub” as if it were a check, then wrote checks off of that (over $1000). And had no means to cover the amount.
you cashed a valid check made out to some one else.
One other single instance of a woman who habitually wrote bad checks on her own account. Her dad and husband ALWAYS made good on the checks and fees, she eventually went through every single bank in the area, because eventually, each bank closed her account because of her writing bad checks, FINALLY, even though the dad and husband were willing again to make good on the check, the county prosecuting officer and banks stepped in and said, in effect, enough is enough. But frankly, she’d been writing bad checks for a very long time.
Or, you refuse to make good on the check at all. (or can’t or whatever).
so, pretty much all of the scence you describe wouldn’t, in general, GET prosecuted, although it’s always a possibility. Often, it’s the THREAT of prosecution that gets payment coming. An employer I knew bounced paychecks to his workers. One of them had cashed her paycheck at a grocery store, the check bounced and they hounded her. I helped her contact the prosecuting attorney’s office who then called the employer up and “suggested” that he make good on the check.
Several years ago I was selling retail sporting goods. To take some of the nuisance factor out of dealing with customers I’d had a pretty liberal check policy.
A group of college aged kids bought about $120 in fishing gear. One of the guys was going to pay for the entire puchase by check. When I asked for ID, he responded that it was in the Jeep and volunteered to go get it. I chose to let it slide.
Well it turned out that the checks had been stolen. The guy was easy to track down as he’d given his work number when I asked for a phone number.
After being busted he hired a lawyer. His lawyer called me and offered to make the check good and to throw in $20 “for my trouble”.
I contacted the local sheriff and asked how they intended to proceed with the case. After getting some less than straight answers they asked me what I wanted to do. I told them that if they wanted to persue charges that was fine with me. They actually discouraged me from persuing the charges and recommended that I take the $140 and run.
I was, to say the least, disappointed in out local sheriff!
Hey Southern, I like yr style!
yea, it can be pretty disheartening. Ya think THAT one’s bad:
I had (note past tense) an employee who helped herself to the company checks and wrote 3 of 'em, had a friend help cash them, to the tune of $11,000! The forgery took a couple of weeks for it to trickle down enough so that I found out (due to the bank’s error - they called the first one and accepted this other person’s word that it was ok. scmuck) anyhow. When they finally questioned a fourth check, and talked to me personally, it all started coming out. I went to the bank, swore out a statement that the signature was forged, agreed to testify etc.
The bank chose not to submit the case for prosecution. I guess they didn’t want to admit that they’d errored and it’d cost them $11,000. (yes, the bank absorbed the cost, not my company)… Go figure.
On the other hand, when I confronted this person, and told her that she was being suspended w/o pay until after an investigation (I couldn’t ‘prove’ it at that moment), she said she knew she’d be vindicated. How did she walk with balls that big???
And this is in no way to excuse people who are trying to beat the system, but this nailed me one time.
If you don’t already know this, it’s common practice in banks to sort checks not by check number, but by the amount of the check in descending order.
I found that out the hard way. I had always assumed that checks were sequenced in ascending order of the check amount. That way, if there’s a problem, you’ll have more checks that do pass thru the system without incurring service charges. I found out that not only did my bank sort in descending amount, but it was common in the industry!
So, if you have $100 in the bank (and thru an math error, thought you actually had $200), and checks for $75, $50, $20, $10, and $5 hit the bank that night. The $75 check clears, and the other four bounce, and by consequence incur the service charges. In ascending amount, only the $75 check would cause you some embarrassment.
1)Won’t get prosecuted. Negligible amounts and probably won’t even be noticed.
2 through 7) These are all examples of ‘kiting’ checks, which is illegal. Whether or not they are prosecuted probably depends on the amounts involved and how often they do it.
Conviction for check kiting can have some pretty serious effects. You can be sure that you will never be employed by ANY company in the banking or finance fields, and you would not be bondable.
Here’s a second hand story – with a better ending.
My next door neighbor bought some software in one of the local stores and paid by credit card. (The guy always pays by credit card or check – I’m not sure that he’d recognize cash. ;))
The employee that had rung up the purchase, capture the credit card number, and later that day ordered himself a $2,000 PC, mail order, and paid for with stole credit card number. (Since neighbor had offered all appropriate ID, the thief had all the right answers for the telemarketer.)
When the credit card bill came in, the neighbor quickly spotted the $2,000 charge, informed the credit card company, and the wheels of justice started turning.
Once identified, the perp’s family hired a high powered lawyer that contacted my neighbor and tried to talk him out of prosecuting. The lawyer’s argument was that “the kid has already finish 2 years of law school, with a felony conviction he’ll never be able to practice law – you’re going to screw up this kids life.”
I’m happy to report that my neighbor responded, “I’m not screwing up anybody’s life – I’m not the thief”, and continued to press charges.
Like Cheif Wahoo said examples 2-7 are all examples of kiting. Most banks will close your account if they catch wind of it, but it’s typically got to be “obvious” as in your example #3
Southern Style:
In your sporting good story, I can understand the rationale behind the sheriff’s non-action, you’d already recovered your loss, and it would have cost much more to prosecute the guy, add to it that under certain limit it’s only a misdemeanor (in California anyway) and the guy probably didn’t figure it worth the effort.
A few months back I remember seeing “60 Minutes” episode about these large rings (most operating out of Miami) who steal letters containing checks from the US Mail. They then remove the ink from the checks and alter them (payable to them) and cash them. Well, a lot of people have had their checking accounts looted by these theives, and the postal service can’t do much about it (apparently). My question: when you print your own checks using Quicken, can this happen? How can you be sure your checks won’t be stolen and altewred in this fashion?
A woman who worked part-time for my company and
full time at a bank actually took a check made
out to us, added her last name on the front
(i.e. XYZ Corp/Smith) and got the bank to cash it.
I found the check was missing in a routine search
and called the attorney who had written it out of
his escrow fund. When he realized what happened,
I could see the steam coming out of his ears
(pretty amazing, since we were on the phone).
She was reported, had to make good on the funds, and
both she and the bank were prosecuted by the
attorney. Never mess with an escrow account!
Just a note. The people who prosecute for worthless checks are generally not the banks, but rather the people to whom the worthless checks were written. The bank will close your account if you write an excessive number of NSF checks and don’t bring your account out of the negative column in a hurry. As long as you come up with some cash to cover any money they’re out in a reasonable time, they’ll be happy to let you bounce checks like crazy – and take $29.00 for each one!