A bad check is sometimes also called a bounced check. This is because when the recipient's bank passes the check to the writer's bank for payment, the writer's bank returns it unpaid, thus "bouncing it back." A bad check may also be referred to as an NSF check, standing for non-sufficient funds.
The criminal consequences of writing a bad check are determined on a state by state basis. In every state, writing a bad check is a criminal offense that can lead to a fine at minimum. In every state a custodial sentence is a possibility, though in some states this may be restricted either to those committing a repeat offense, or those writing a bad check with a value above a particular limit. Maryland has the toughest penalty with a potential maximum sentence of 15 years.
In theory, criminal charges can result from any bad check. In practice the proportion of checks that prove bad because of a mistake mean prosecutors only take action where there is a clear intent to defraud by the person writing the check. That is, he intentionally attempted to get goods or services from the recipient despite not having the funds to back the check.
State laws may also impose automatic civil penalties for writing a bad check. Usually these involve the writer being required to pay an additional fee to the recipient, either a flat amount, a multiple of the check's value, or both. Note that although court action may follow to enforce this payment, this is a civil case and thus does not count as prosecution.
Payday Loan Checks
Payday loans are a form of short-term lending most commonly used for people struggling with cashflow. They often involve the borrower writing a check dated for a future date, for example his payday.
State law may mean that such a check cannot lead to criminal prosecution if there are insufficient funds on the relevant date. For example, Missouri's law works on the basis that the recipient (the lender) was aware there were insufficient funds on the day the check was written, meaning it cannot be considered a bad check even if the recipient expected there to be sufficient funds on the date the check was dated.
Users of payday loans should check their relevant state law for clarification on this issue. They should also be aware that although the check will not lead to criminal charges, the failure to repay the loan may have civil consequences.
- National Check Fraud Center: Bad Check Laws by States
- Payday Loner: I Can't Pay Back My Payday Loan. Will I Go To Jail?
- National Credit Union Administration. "Understanding a Check and Balancing a Checkbook." Accessed Apr. 27, 2020.
- Consumer Financial Protection Bureau. "I Received a Check Where the Words and the Numbers for the Amount Are Different. Is This Check Valid and for How Much?" Accessed Apr. 28, 2020.
- Consumer Financial Protection Bureau. "Can a Bank or Credit Union Cash a Post-Dated Check Before the Date on the Check?" Accessed Apr. 29, 2020.
- Consumer Financial Protection Bureau. "Can I Cash a Check at Any Bank or Credit Union?" Accessed Apr. 29, 2020.
A professional writer since 1998 with a Bachelor of Arts in journalism, John Lister ran the press department for the Plain English Campaign until 2005. He then worked as a freelance writer with credits including national newspapers, magazines and online work. He specializes in technology and communications.