A few weeks back, I realized that I was going to be out of the country when my estimated taxes (state and federal) fell due this month. I decided that I would send the governments checks that were post-dated to the due date (the 15th), and set up an automated transfer to move the required funds from my savings account to my checking account on the 15th as well. I then mailed the checks before I left.
I returned from my vacation today, logged on to my bank’s online account access, and discovered that the checks had been cashed on the 12th, rather than the 15th. There wasn’t enough money in my account at the time to cover the checks, so my bank transferred the shortfall from my savings to checking and charged me a fee for it.
My questions are:
Under such “bounce insurance” policies (i.e. automatic transfers to checking when it’s overdrawn), do the recepients of the check know that the check effectively bounced? I’m concerned that the governments are going to slap me with penalties for giving them bad checks.
More importantly, have I been deluding myself all these years about how post-dated checks work? I thought that checks couldn’t be cashed before the date written on them. I’m going to go to my bank tomorrow and see what they say, but I’d like to know if I have the legal/moral high ground here before I ask them to refund the bounced check fee. Am I in the right, or have I just set myself up for a tongue-lashing from the SMDB denizens?
The person or institution is not required to wait until the posted date. I also found out the hard way. The date on a check is only used for expiration purposes, after so long it cannot be cashed. As I am not a financial wizard in my own life, seek other’s assistance.
#1 . No the person you wrote the check to does not know about the bouncing. To them it is just another cleared check.
#2 They do not have to wait until the date to cash it but sometimes a little post it note on the check to draw their attention to it, they will hold the check.
#3 I would still try to get a refund on the fees but I would not hold my breath.
The bank may very well refund the fees, my bank can only do two fee refunds at a time. It is certainly worth a try, especially since you did that trying to be a conscientious person. You have no moral or leagl high ground, but play the good-hearted role, that may score you some points.
If your bank had refused the check because of the date, the IRS would consider it bounced and you’d be worse off than you are now, so you should probably quit while you’re ahead.
Check processing is so automated now that most checks are cleared with nary a human actually reading it, except maybe the amount. OCR scanners do not care about pleas to hold the check. I have also had checks cashed by someone other than to whom they are made payable (put bill payment in wrong envelope) without the bank blinking.
Let me expand a bit on this. My reply above deals with whether the bank (drawee) acted properly. (It did.) Under some circumstances, though, in a consumer collection situation, the payee may not cash a postdated check without notice to the drawer. That obligation is not present in the situation described by the OP.