Dishonoured cheque

Dishonoured cheque
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Methods and techniques

Dishonoured cheque (also: dishonored check, bounced, returned) is returned by the bank unpaid, as there are no sufficient funds on the account of the issuer. If the issuer had known that the account is empty and issued a check, it is treated as criminal offense.

Reasons for dishonoured cheques[edit]

The main reasons are:

  • insufficient funds on the account,
  • stale cheque - beyond validity period (3 months),
  • post dated - presented to the bank before date on cheque,
  • ante dated - more than one date that leads to post or stale cheque
  • multilated - incomplete due to damage (some part is missing),
  • crossed to many banks - if contains special crossing for more than one bank,
  • property not marked - lack of company seal (company cheques only),
  • exceeded arrangement - limit of overdraft account is not sufficient.

Interbank Withdrawal Protocol[edit]

In countries that have a high level of inflation, and the recovery of due money is difficult, we can find people who are indebted in one or many banks. They place their deposits in accounts at alternative banks than they carry out financial transactions by the last bank. The number of false checks increases as well as the number of people who act in this way. By this large amount neither the bank nor the applicant are able to get the money. Due to the difficult, long and expensive costs of court hearings, those in need do not receive adequate legal assistance. Interbank Withdrawal Protocol is a solution to the trouble with checks. His creator is Rastin Banking2F3. Using the information and communication technology, they collect claims from various banks that were unavailable to the requesting person. (B. Bidabad, M. Allahyarifard 2013,1)

Database for check risk decisions[edit]

Some banks that have contact with the first deposit offer customers data verification. This is done on two types of checks. Those delivered and rejected. This data is used for a static model that calculates the probability that a given check will be rejected. The downloaded information fills in the database of verification accounts. Then they are used to decide if the check should be blocked, what is the level of acceptance risk.(S. M. Diaz, J. Swartz 2013,3)

Debt Recovery Act[edit]

The established procedure for recovering money from fake checks is determined by the Debt Recovery Act. A person who deliberately writes an unpaid check may be sued to obtain the promised money. The recipient does not have to be a loan company. The fifth part of the Act calls for criminal liability, those who issue a check which will not be accepted by the bank. Thanks to this, private individuals who received an unpaid check could also file a complaint.(I. Rathnapala 2015,3)

Costs Of Breakingy Our Financial Commitments[edit]

Checks require a balanced account from the owner. If it turns out that the account does not have the right amount of money, the person issuing the check is charged with an additional financial penalty for returning the check. If someone wants to avoid the penalty for a refunded check, he can contact the recipient, in order to request a delay in the time of payment by check. The time of delay may not exceed more than three months. During this time, he must collect appropriate funds to pay off the debt.(Financial Consultant 2018,1)

The process of removing checks[edit]

For paper documents we can include a check. This is an order for sending money between banks. People who are used to using checks according to British statistics will live for another ten years. However, checks can be withdrawn by that time. Banks in the United Kingdom are launching an initiative to implement electronic check replacements. They would be much cheaper and less susceptible to attempts by cheaters. Checks are designed to help exchange money with other people in a way that digital technologies do not.(J. Vines,P...,... P. Olivier 2012,1)

References[edit]


Author: Aneta Suder