Definition of Bad Check

What is a “bad check”? What is the definition of the term “bad check”?

The term “bad check” refers to when a check is written and ultimately returned for insufficient funds.

In most cases, a “bad check” is written accidently when a person is unaware that they don’t have the money in their account to cover the amount of the check. This often occurs when people are moving money around in their accounts and the check is cashed at a time when the balance happens to be low.

Definition of Bad Check - Finance DictionaryIn some cases, people will fraudulently attempt to pass “bad checks”. For instance, they may write a check on an account that they know is closed, or they may write a check while knowing that there are insufficient funds to cover the amount of the check.

A “bad check” will almost always result in a NSF charge from the bank. These charges can be quite high ($40-$50+ per NSF charge).

People who knowingly write bad checks can also find themselves in trouble with the law - knowingly writing bad checks is fraud and can land a person in jail.

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