Written by Tana Fye and Sheri Crosier
Occasionally a business owner tries to deposit a check and the check bounces. Depending on the amount of the check, it might not be a big deal, or it might create a hardship for the business. Here are some ways to handle receiving a bad check.
- Call the bank. There is a chance the person’s account didn’t have the funds available in their account at the time the business owner attempted to cash the check. They may be able to tell you if funds are available now, or if there are other routes you can go to collect your funds.
- Call the customer. There is a chance the customer did not mean to write a bad check. You could call them and ask if they have a different form of payment, or when you would be able to attempt cashing the check again. They can also be made responsible for any return check fees that you incurred from your bank.
- Try sending a certified letter. Often times, a person’s address can be found at the top of their check. Send them a letter requesting the debt be paid within a certain time frame. Be sure to request a return receipt from the mail carrier for your certified letter.
- Use a check recovery service. This is a little known option, but one that can often times work better than other methods. Typically, these services are free and you get to keep the entire value of the check. This service is funded by a fee charged to the check writer that issued the bad check.
- Contact a collection agency. These services are similar to the check recovery services, but they charge a percentage of the charge they are collecting for you. They work to locate the check writer and collect the charges for you.
- Contact your local County Attorney’s Office. They often work with businesses to get returned checks taken care of without any type of criminal filing. But sometimes criminal charges against the person who wrote the check are necessary if they refuse to respond or pay the check, or if they have a history of writing bad checks. Restitution can also be available through a criminal case for bad checks. The County Attorney will evaluate which course they choose to use.
These are a few ways a business owner can collect on a bad check. While no method is guaranteed to produce the money owed to you, they are some of the best methods to receive your money.
If your business finds that it has received a bad check, you can also work with your own attorney to evaluate these options, as well as the option of filing suit against the check writer. An experienced attorney can help you evaluate which option is best for you and your particular circumstances.