If you deposit a check that bounces ...

UncleJoe

does your bank charge you a bounced check charge?

My bank (credit union) charges me $10.00. For those of you that accept checks for payment, how do you deal with this? or do you not get charged for others' bounced checks?

Joe.

presleyh

My bank charges me 10.00 for somebody elses bad check. You know like i could do something about it?

lathmach

I think all banks charge for bounced checks. Doesn't matter if it's one you wrote or one you deposited. My bank charges $30.

Ray

agentjim007

Thats always pissed me off. First you get shafted by check writer then your bank.

its4real

Make several copies of the check, make several copies of the charge from your bank, make a nice looking stement with an additional handling charge ($50 is nice) and send i to the local (where the checkwriter is) police department and District Attorneys office.

You'll get your money and then some :-) And the investment is a stamp and 2 copies.

Like all good investments - it does take a little time

paulheep

My bank, Western Financial, has no charge for dishonored checks on certain business accounts.

Paul

CarlWohlforth

I would get a $25 bounced check fee. But (knocking on wood) it hasn't happened to me yet. I think I need to make it clear that I expect the buyer to write a good check and pay for all fees if it bounces...

4thStooge

Contrary to what many of you may think each state has statutes governing both criminal and civil remedies for recovery of worthless checks. For example, these are Florida's statutes...

Civil remedy

Criminal remedy

Defining the criminal act


The victim may pursue both remedies simultaniously.
Attempting to recover without knowledge and use of the law may make you subject to litigation.

BAJJERFAN

Be selective about who you take personal checks from and also for your own protection about the kind of personal info that YOU put on yours.

Mark

Some years back, my wife and I got a $10 Christmas check from one of her relatives. She deposited it and it bounced, for a $10 service charge. My wife redeposited it and, yep, it bounced again for another service charge. This is not a story that gets mentioned a lot around our house.

Mark

UncleJoe

Mark, I hear you.

Unfortunately for me, it was one of my relatives that sent a $25. birthday check to my daughter, it bounced (I forget the fee). I did not bother to redeposit it, I just gave my daughter the money out of my pocket.

Joe.

Beatlemen

Unclejoe, I work for a bank, unfortunately there is no way to avoid paying a bounced check fee. I would suggest that you don't accept checks as forms of payment to avoid this from happening.

gmarguli

I think my bank charges $20 for each bounced check. It's been so long since anyone bounced one to me. He was a PCGS Dealer.

My bank used to have the same employees all the time and they got to know you and the manager would "forgive" the fee if you asked. Then they got bought out and this bank is used as a training bank and we have new employees all the time.

Pushkin

OK, My apologies in advance, but the bounced check question got under my skin, so its "soapbox time".

My personal belief is that all too often these bank fees, including the bounced check fees, are just another blatant example of what I call legalized bank robbery.

There have been a number of documented cases where people deposited small checks (under $100) that have bounced and the bank then automatically deducted the fee from the account without the account holder being aware of the reduction in his/her balance (sometimes happens when people are on vacations, travel, etc.). Then the person writes a check believing that they have sufficient funds (not aware of the $10 or $30 fee). Their check then bounces, another fee is charged, and that one small bounced check not only costs $30, $60 or more, but it can affect a person's credit because the "overdraft" is reported to the agencies that provide verification services of checking account standing, as well as, in some case, to the credit reporting agencies. I even know of one case where a person was not aware of the bounced check and related fees until after the bank closed their account. The bank continued to charge a $25 fee per month because the bank said there was still a balance due on the closed account!

Has there ever been a case where a bank made an error and paid the client a fee? (ROFL)

In the 1970's the banks and their colleagues the credit card companies, spent millions lobbying Congress to get state usery laws watered down via federal law so that they could charge almost any interest rate they wanted. Since then they have used "fees" as another way to get around the very few protections of the Fair Credit Reporting Act, multiplying their profits from the demise of usary laws and compounding their profits with fees. In the 1990s the banking lobby again spent millions lobbying Congress to try and restrict the operations of credit unions, and very narrowly lost that fight.

So, I try to limit my contact with banks as much as possible - including being extremely selective about accepting checks - mostly because I know I will lose twice - once to the deadbeat buyer, and once to "legal bank robbery". I suggest trying to avoid hospitals and banks if one wants to remain physically and financially healthy.

OK, I'll get off this silly little soapbox and go back to admiring my recently acquired and beautifully toned (purple-blue PCGS slabbed IHC), and pet the cat.

Thank you for your attention.

Rampage

I only had one buyer bounce a check on me. My bank charged me $5.00 only. It took several phone calls and emails, but I finally got the buyer to honor the check and he paid me by paypal the amount of the check, plus one dollar I asked for for the long distance phone calls. I am not a dealer. Just a private collector selling my extra stuff. I sent this guy his goods and his dinky $20.00 check bounced. Go figure. So, in my auctions, sometimes I mention the length of time i wait to mail items (sometimes I forget to mention it). Instead of my normal 5 day wait, I wait 10 business days. All because of one bad apple. I know people hate that about me, but what can I say. If you not want to wait, then pay by MO or something. Rampage!

Bear

Pushkin - Your response was not a soapbox , but rather a statement of cold , hard reality.
Banks are taking advantage of the public to fatten up profit balances.
They make bad corporate and international loans,
and we working stiffs are supposed to make up the losses.
A time will come, when our government will put some reasonable limits
on such outlandish fees and policies. Yours has been a well writtrn and thought out reply
to a growing and irritating problem. Bear

baccaruda

technically (if i remember my business law correctly) you do not have to pay the bounced check fees for the following reasons:

1. unconscionability: paying $20-$30 for a service that costs a bank roughly 50¢ is unconscionable.

2. negotiability: you have no negotiating power with the bank. you can't offer them $1.00 for each bounced check - you either accept the $25 charge or they refuse the account.

3. all banks have the same high cost.


since the bounced check fee meets these 3 standards you technically don't have to pay the fee. banks get around this by simply debiting your account and counting on the fact that you won't go thru the hassle of getting the $25 dollars back.

Aaron04

My bank charges $ 8.00

gmarguli

baccaruda:

1) The banks are allowed to make a profit, even an obscene percentage. All companies are.

2) You can negotiate with the banks. Business accounts don't necessarily get charged these fees. You can negotiate a price with any company. They just don't have to accept your offer.

3) Not true. Some charge nothing, some $8, some $30.

As with everything, you have a choice. If you don't like the way your bank does business, then you are free to switch. When you sign up for your account you agree to the terms with the bank. If you don't agree with them, then you should take your business elsewhere or not use a bank.

tompkins

Baccaruda said:

"technically (if i remember my business law correctly) you do not have to pay the bounced check fees for the following reasons:

1. unconscionability: paying $20-$30 for a service that costs a bank roughly 50¢ is unconscionable."

How do you say it costs 50 cents? For starters, it costs nearly that much in postage. There is manual handling of the returned item; a person decides whether to put it through again (which is one of my pet peeves) or return it to the account holder. The people that handle this check, address the envelope, etc. cost the bank real money. I don't know how much, but I suspect $5-$10 is a reasonable estimate.

"2. negotiability: you have no negotiating power with the bank. you can't offer them $1.00 for each bounced check - you either accept the $25 charge or they refuse the account."

Of course you have negotiating power. You ALWAYS have negotiating power in a competitive environment. And, in most parts of the country, banking is quite competitive. You have the power to move to another bank. As we see in this thread, there is a wide range of charges imposed by banks.

"3. all banks have the same high cost."

Same comment as above---we see in this thread costs ranging from $0 - $30 for the same thing. One must balance the charges and services when chosing a bank (or any other service provider).


By the way, in California, I think Washington Mutual still only charges $5.00 for a bounced check (my wife deposits rent checks to WM specifically for this reason). Also, CA has specific remedies for recipients of bad checks, including recovery of any bank imposed fees and payment via cashier's check or cash. Failure to comply in a timely manner can result in tripling the amount owed.

I think it is unfair to place blame on Banks when it is the dead-beat check writers that are the culprits in this case. If you are in a business where you might receive bad checks, then pick a bank where that fee is minimal.

Pete

jtryka

My bank charges $5 for a returned depsosit item, but $25 if I write a bad check, illustrating their understanding that you have more control/responsibility over what you write than what you deposit. I have found though that most times these fees are not written in stone, but in fact can be reversed if you have a good relationship with your local banker and ask politely.

BigD5

Negotiation is always possible. I've had the fees waived from checks that I received that bounced. It wasn't really that big a deal. I just asked. They looked up my account, talked to the manager, and presto, all gone. I would imagine if it happened often, it wouldn't be so easy, or possible at all.

I had another "funny" banking experience. I went to a bank to cash a check from a customer. I didn't have an account there, but the check was drawn from that bank. The teller comes back and says "we can't get a hold of the customer to verify the check". I just shook my head and told him to get the manager, and cash the check. The manager came over and started to explain the bank's "policy", and I explained that they could shove their "policy", that the check was drawn from this bank, and I wanted it cashed, or I was going to report them to the state banking commission. They cashed the check, and later that week I made a call to the banking commission and was told that they can "suggest" I open an account with them, but they HAVE to cash that check. I think this varies from state to state. Boy was I ready to jump the counter that day. My brother in law is head of security at a Boston bank, so I get tidbits of different "policies" that are "garbage".

baccaruda

my recollection dates back to my business law class in college (1990). the professor quoted an average cost to process a bad check of 53¢. the last time i bounced a check maybe 7 or 8 years ago all my bank did was cover the check themselves - and charge me $25. they actually charged me more in fees than what the uncovered balance was. i would imagine the interest on the uncovered amount was roughly 10-20¢. so an average cost of 53¢ sounds pretty reasonable.

as for the competition part - i remember there being much less competition in banking in 1990 than there is today - so that may be dated.

baccaruda

btw i didn't just make this up or have a strong opinion on the matter but am simply regurgitating an example used in the class - it may not apply anymore due to improved banking competition.


another example: your car is damaged in an enclosed parking garage. they have a sign stating they aren't responsible for damage. nearby garages have nearly the same price and the same policy. is the garage respoinsible for the damage?

absolutely - don't always believe signs.

gmarguli

baccaruda, I hate to say this, but take your car somewhere else or don't park it. They are at fault if they were negligent for the damage. If someone hits your car and the garage did everything they reasonably could to prevent this then you are out of luck.

its4real

>>>The manager came over and started to explain the bank's "policy", and I explained that they could shove their "policy", that the check was drawn from this bank, and I wanted it cashed, or I was going to report them to the state banking commission<<<

Great line! I had a similar experience and was forced to open a passbook savings account to deposit a $140 check. I went back a week later to withdraw the funds and was told that there was a $6 fee because the balance never passed $200 and also another $6 because I wanted to close the account be fore a 6 month time period. I exploded, told the "assistant VP" what he could do with it, told them I was going to have fun writing letters, and the guy siad "no prob - here's your money".

The nerve of these banks.

jtryka

This is why I'm glad my college had a requirement of 2 business law classes to graduate. If I run into morons at the bank, I just quietly leave and return a little while later with my copy of the UCC, which explains their responsibilities in detail regarding negotiable instruments.

baccaruda

i don't make the law.


what if a supermarket had a sign that said that they're not responsible if you slip and fall?

what if a car dealer had a sign that said they're not responsible if you're hit by a car on their premises?

how about a gun shop that said they're not respsonsible for injury if the place bursts into flames?

how about if i have a sign on the front of my car that says i'm not responsible for traffic accidents?


anyone can hang whatever sign they want but it doesn't make it legal.

truthteller

Best advice. Have a great relationship with a small bank. The large banks don't care who you are, how much you have, etc. The small banks go out of their way for your business. I have a small account, but large by little bank standards. On most occasions, they wave incidental fees and cover any overdrafts if I'm out of town. In addition, many tellers and branch officers know me and help me out as much as possible. Mind you, I am a little fish, and good treatment goes a long way.

TRUTH

canadiancoinguy

Probably the best thing is avoid taking checks if possible. Money Orders aren't too expensive usually. My bank charges $25 for bad checks.

crito

I've had it happen with GOOD checks... charged $25 because the bank couldn't "process" it, for whatever reason (the funds were there.) Even happened once with a Money Order.

IrishMike

80% of the checking accounts a bank has were never profitable. Back in the late 70's and early 80's to break even on a checking account the average collected balance had to be $800. I can tell you that 80% of the clients at our bank were unprofitable. The result was that you paid more for mortages, car loans etc., got less on CD's, savings accounts. etc. Banks are heavily examined and have very stringent capital and earning requirements. Somewhere the money has to be made.

Banks woke up and realized that they were giving away their product, fees for overdrafts were increased, fees of charging a bounced check back to your account were instituted, balance inquiry fees etc. etc. Mortgage rates are at record lows, car loans rate are ridiculous. One way or the other you will have to pay, banks have to make profits to stay in business. The sad fact is that you should have your checking account at a credit union, which by federal law cannot make a profit, and borrower your money from a bank. Believe those clients who keep substantial balances in their accounts get fees waived all the time. Why, because the bank makes money off their accounts. If your average collected balance on a monthyly basis isn't $1500 then you are a loss leader. That is the sad truth. I could go on and on, but probably have bored most of you. Proud to say I have been a banker for 31 years. One last thought Banks never lobbied anyone to raise usery laws, states set them. In fact bankers have led the way to cap interest rates, with the sad exception of credit card rates.

BAJJERFAN

A simple way to CYA in the event YOU write a bad check is to have an agreement with YOUR bank to automatically transfer funds from savings to checking. Be sure to specify whether the amount transferred should be the amount of the check written or the amount of the deficiency. Around here my bank charges about $3 for this but it beats a bigger fee and the embarassment of writing a bad check. I used to get money orders from my local grocery store (were 50 cents are now $1). Had one take over 3 weeks to get to a seller so I began to inquire about what to expect if one got lost. I was told at least a 60 day wait and a $12.50 service charge would be deducted from the refunded amount; provided I was smart enough to save the receipt in the first place. I checked with the good ol post office. A $2.85 fee to file a claim and a shorter (hopefully) wait. And no $500 limit on the MO either.

Spooly

FYI..... Greg is in banking!

tompkins

<< <i>FYI..... Greg is in banking! >>

So am I---but that doesn't change any of my statements. I would have made the same statements had the charges been levelled against most other industries. I also feel that charging in demanding your legal rights, while it may be a good short term strategy, is usually a bad long term strategy---first, the people who write the rules are pretty careful to make sure the rules are legal---you wouldn't believe how many lawyers, compliance people, auditors and/or federal regulator look at everything we do---and I'm in a technology unit that doesn't have direct access to customers or their money! So the people in a branch may give in just to make you go away, the chances are that the rules they are enforcing are (at least under some competent lawyer's interpretation) legal. There are always exceptions especially when there are special local regulations (many of which cannot affect a nationally chartered bank), but in general, I wouldn't stake my money on trying to prove most banks' policies illegal.

As I would say in almost any non-monopolistic industry: if you don't like, there is a competitor somewhere close by who will have a better deal for your special situation.

Pete