Is It A Crime To Bounce A Check? A Guide to Legal Penalties

Is It A Crime To Bounce A Check? Yes, bouncing a check can be considered a crime, usually classified as check fraud or theft, depending on the intent and the amount.

Bouncing a check is too common an occurrence for too many, either due to insufficient funds, clerical errors, or technological malfunctions.

While it is most commonly an oversight, bouncing a check can have serious legal, financial, and personal consequences. So is bouncing a check illegal?

In this post, we’re going to examine the legalese of a bounced check, the kinds of penalties you might face, defenses you can raise, and ways you can prevent committing this financial faux pas in the first place.

By the time you’re done reading this, you’ll know what to do if you’ve already been in this position or how to avoid being there at all.

What Is a Bounced Check?

Definition of a Bounced Check
A bounced check is when one writes a check for more money than the current balance in the checking account. In effect, the check will not be accepted because the money is not there to pay for the transaction.

When a bank gets a check for more money than the amount of available money in the check writer’s account, the bank rejects the transaction and sends the check back to the recipient person or organization. [Is It A Crime To Bounce A Check?]

When this happens, the payee will be left with nothing that was owed to him, and the check writer will be responsible for the penalties because of the failed transaction. This is called a “bounced” or “returned” check and can result in a great deal of financial and legal problems.

Common Reasons for Bouncing a Check
Even though it’s normally a regrettable mistake, there are several reasons a check will bounce:

Insufficient Funds: It’s the most common reason. If you don’t have enough money in your account to cover the check, it will bounce.
Bank Errors or System Malfunction: Sometimes a bounced check is the result of a mistake made by your bank or the payment system failure. While rare, the error can also have effects.
Writing Errors: Small errors such as incorrectly writing the date, misspelling the payee’s name, or using an outdated checkbook can lead to a bounced check. [Is It A Crime To Bounce A Check?]
Pending Transactions: If you have pending automatic payments or transactions that are still pending and have not cleared, you may believe you have more money than you really do in your account. This could result in a bounced check.
While the reasons for bouncing a check are many, it must be pointed out that the consequences can be severe whether it was done intentionally or accidentally.

Legal Implications of Bouncing a Check

Check Fraud vs. Insufficient Funds

Not all bounced checks are the same. Legal penalties differ depending on the intent behind the check. If you knowingly write a check for an amount you know you cannot pay, this may be check fraud—a crime.

When fraud is involved, the check writer is usually trying to deceive the recipient into taking the check with the knowledge they have money in the account.

But if the check does bounce because of a shortage of funds that you did not know you had or because of an honest error (like not monitoring your balance closely enough or having forgotten to account for an automatic deduction), you may only be subject to civil sanctions instead of criminal charges.

In some cases, even if you did not intend to defraud, the recipient of a bad check may still choose to pursue legal action, especially if the check was written for a large value or the situation was part of a pattern.

Criminal vs. Civil Penalties

The punishment for bouncing a check can vary depending on the circumstances:

Criminal Penalties: If the bad check is found to be involved in a fraud scheme or made in a purposeful attempt to defraud, you may end up with a criminal charge. [Is It A Crime To Bounce A Check?]

Criminal penalties might range from fines to court-imposed restitution, as well as even imprisonment, particularly if the check is a large one or if you’ve been convicted before of writing bad checks.

In some states, the writing of checks in amounts over a certain threshold (e.g., $500 or more) is a felony, punishable by heavier fines.

Civil Penalties: Even if the bad check is not considered fraudulent, you can be held to civil penalties. The recipient of the check has the right to sue to recover the funds. This could result in a lawsuit for the full value of the check plus any fees for court or collection that have been charged.

These sanctions will not be in the form of jail time, but they can lead to costly financial penalties, such as adding court fees or a judgment that can impact your credit score.

Penalties for Bouncing a Check

Fines and Restitution

When a check does not go through, the first financial consequence is usually a fine. Banks will typically charge a returned check fee when a check cannot be paid because there are insufficient funds. Bank-to-bank fees vary but can range from $20 to $35 or more per bounced check.

The recipient of the check (individual or business) may also charge an extra fee for the inconvenience of the bounced check.

You will also be required to pay restitution—the check’s face value—plus any additional fees incurred via the bounced check.

Possible Jail Time

Based on the standing of your bounced check as a component of a continuing scheme to defraud or as a component of an all-around campaign of deception, you can face criminal charges.

You might in such a case be fined, ordered to repay restitution, and, in the worst case, incarcerated. [Is It A Crime To Bounce A Check?]

For instance, in some states, writing four poor checks or writing a check for an enormous amount more than you can handle may be sufficient to charge felonies. Convincing on a felony is likely to expose you to harsher penalties, including prison time.

Impact on Credit Score and Banking

Bouncing a check can have consequences that go beyond your short-term finances. If a bounced check results in a collection or is sent to credit bureaus, it may harm your credit score.

This harm may make it more difficult for you to be approved for future loans, to open new bank accounts, or to obtain credit cards. [Is It A Crime To Bounce A Check?]

Also, if a check bounces, the bank can mark your account as a “high-risk” customer. This might result in increased fees for subsequent services or, in extreme cases, your account being shut down.

See Also: Is It A Crime To Destroy Money? The Legal Risks

Defenses Against a Bounced Check Charge

Honest Mistake or Error

In some cases, a bounced check is the result of an honest mistake. If you signed a check for more than you had in your account or missed an automatic withdrawal, this could be a defense.

Most courts will look to see if the bounced check resulted from negligence or an honest error, rather than fraudulent intent.

Technical Issues or Bank Errors

The most frequent defense of all is that the bounced check resulted from technical malfunction or bank error.

In the event that you had more than enough in your account but a processing holdup or some sort of equipment failure resulted in the bounced check, you should be able to defend yourself from criminal charges.

When this situation arises, bank or financial documentation describing the failure can be instrumental in supporting your case. [Is It A Crime To Bounce A Check?]

What If You’re Not Able to Pay the Check?

Consequences of Not Payment

If you’re not in a position to pay a returned check, the situation can be worse. The recipient may take you to court or initiate legal collections for funds.

This could result in additional attorney costs, wage garnishment, or other financial charges. If the issue isn’t immediately addressed, it might also negatively impact your credit score.

Civil Actions and Lawsuits

If you do not pay a bad check, the person or business to whom you gave it may sue you. Beyond the face value of the bad check itself, they may be awarded damages for attorneys’ fees, time expended, and other expenses of processing the bad check.

If the plaintiff wins, the judgment is against you, and your credit takes a hit with further financial and legal penalties. [Is It A Crime To Bounce A Check?]

How to Avoid Bouncing a Check

Managing Your Checking Account

The easiest way to avoid bouncing a check is to maintain your account balance in working condition. Check online, using cell phone applications, or just maintain a paper notebook to track your disbursements. Ensure that you have adequate funds in the account before issuing a check.

Setting Up Alerts

Most banks offer balance notices or reminders to notify you when your account is low. Signing up for these notices is a simple but effective way of avoiding bouncing checks due to insufficient funds. You could also employ overdraft protection services, which can stop you from bouncing a check if your funds are low.

Conclusion: Is It A Crime To Bounce A Check?

Bouncing a check is more than a mere annoyance—it can have legal and financial repercussions that can impact your credit, lead to fines or imprisonment, and create a long-term burden on your personal finances.

Although occasional errors or good-faith mistakes may be excusable, issuing bad checks with the intent to defraud or deceive is a serious offense that can have long-term repercussions. [Is It A Crime To Bounce A Check?]

By maintaining your finances under control, keeping your account balance up to date, and employing alerts and overdraft protection, you can avoid the money issues of bad checks.

You should be aware of both the criminal and civil penalties for bad checks to help you navigate the potential consequences and trigger preventive actions.

FAQs

Does Bouncing a Check Ruin Your Credit?

Yes, a bounced check has the potential to leave a negative credit mark if it results in collection or is reported to credit bureaus.

How Does Check Fraud Differ from a Bounced Check?

A bounced check most commonly occurs due to not having sufficient funds, whereas check fraud is issuing bad checks with intent to defraud another. [Is It A Crime To Bounce A Check?]

What to Do If You Accidentally Bounce a Check?

Call the receiver immediately, say sorry for your error, and make arrangements to pay them as soon as possible. It’s also wise to call your bank and attempt to clear further charges.

Can You Get Arrested for Bouncing a Check?

Yes, if you are issuing a bad check in a scheme to commit fraud or if you are a repeat bounce writer, criminal charges, and even jail time, may follow.

Understanding the legal consequences and taking steps before, you avoid the risk of bouncing a check and ensure that you maintain your financial integrity.