Do you know the difference between a bad check and a viral hack? If not, this article is catching you just in time. Recently, a TikTok trend that encouraged people to write checks with amounts they didn't have and withdraw before it bounced sparked a conversation about basic finance literacy.
The group of people that started the trend called it a bank “glitch,” when in reality it's check fraud. When you follow this sketchy financial advice you’re writing a bad check—and it has serious repercussions, including fraud charges.
Here's what happens if you write a bad check, with tips on how to avoid writing bad checks in the future.
What is a bad check
A “bad check” is a check that can't be approved by the bank due to insufficient funds, incorrect details, or a closed account. You may also know it as a bounced check. “Essentially, the check bounces because the bank is unable to honor the payment,” says Dennis Shirshikov, a finance professor at the City University of New York, and Head of Growth at Gosummer.
When you write a check, the payee (whether it's a person, an organization, or business) either deposits it to their bank account or tries to cash it. Then, their bank submits the check to your bank in order to collect the payment.
If the account number is incorrect or there’s a lack of funds in the account, the check bounces—meaning the transaction isn't processed. “It’s a common issue in both personal and business finance, where sometimes cash flow management or miscalculations lead to these kinds of errors,” Shirshikov says.
In some cases, writing a bad check might be unintentional: like if you were expecting a payment at a certain date but it got delayed, or if you forgot to check your account balance first and overestimated the amount you had available.
What happens if you write a bad check
Sometimes, bad checks happen to good people. If you unintentionally write a bad check, it's returned and the bank charges you a fee. (The payee’s bank may also charge them a fee, so know that this is not a victimless mistake). “The fee varies by bank but can range from $25 to $35,” Shirshikov says. Each bounced check will incur a fee of its own. For instance, if you write three bad checks you can be charged up to $105 in fees.
“These fees can add up,” he says. “If not addressed promptly, they can snowball into overdraft fees or negative account balances, making it harder to maintain good financial standing.”
If you have a habit of writing bad checks, it can strain your relationship with the bank and affect your ability to open a new bank account elsewhere. Banks and credit unions can access data of your consumer behavior and use this information to determine whether they should make business with you. Finally, constantly writing bad checks can also hurt your credit score if you fall behind on payments.
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Consequences of intentionally writing a bad check
Intentionally writing a bad check has legal implications, since it's considered fraud, which is a crime. “If you intentionally try to defraud someone with a false check or are found to have a pattern of submitting bad checks, legal troubles can vary from misdemeanors to felony charges,” says Ben Michael, attorney with M & A Criminal Defense Attorneys.
You can also be sued in a civil court by the person or business who received the bad check. The laws regarding check fraud in the U.S. vary by state, so varies the punishment. Generally, the check's amount influences the severity of the charges the state will press against the fraudulent check writer.
How much does a bad check have to be, to be a felony?
“The threshold for a bad check to be considered a felony varies by state,” Shirshikov says. “Typically, it’s around $500 or more, but this can differ depending on jurisdiction.” For example, in Virginia a back check under $1,000 results in Class 1 misdemeanor charges, while bad checks over $1,000 incur a Class 6 felony. (Either way, neither charge is one you’d ever want to face.)
How to avoid writing bad checks
It's possible to avoid writing bad checks by simply staying on top of your finances. In practice, that means regularly taking one or more of the following steps.
- Check your balance before writing a check. Don't trust your memory when it comes to money. Always check your account balance to know if you have sufficient funds to clear a check.
- Ask the payee to hold the check until a certain date. If you don't have the money now but know you'll have it soon, you can try to reason with the payee and ask them to wait to cash out the check. (This may be more effective with your mom or roommate than, say, a utility company.)
- Add overdraft protection to your checking account. Overdraft protection is a service that works like a cushion to cover overdrafts in an account. This means that if you write a check with insufficient funds, the bank will cover it for you. However, you might get charged interest and an overdraft protection fee as well.
- Double check the information before filling out the check. If your problem is misspelling checks, try double checking the information before you start writing. Avoid writing checks when you're in a rush and can't really pay attention to what you're doing.
- Use alternative payment methods when possible. Sometimes checks are the only option, but not always. If for whatever reason you've repeatedly written bad checks, consider making your payments with a debit card or cash to avoid fees and other penalties.
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What to do if you receive a bad check
When you receive a bad check, your bank will notify you or you'll see a debit of the check's amount in your account—if you already spent the money, it results in an overdraft. Once you realize that it happened, contact who wrote the check to let them know that it bounced.
Once you figure out together what happened, you may try to deposit it again. Perhaps, they didn't realize they had insufficient funds at the time, but are able to cover it now. In case the check bounces a second time or the person who wrote refuses to acknowledge and resolve the issue, you might need to take legal action.
In order to know exactly how to proceed, check your state laws regarding check fraud and consult a criminal attorney.
FAQs
What if I accidentally wrote a bad check?
As soon as you realize or are informed of your mistake, contact your bank and the payee to fix it. “If you accidentally fill out a small check once with the wrong date, for example, you’re probably going to be just fine legally as long as you fix it,” Michael says.
What happens when you write a check with insufficient funds?
When you write a check with insufficient funds, it “bounces.” When a bank or the payee says your check bounced, it means the transaction wasn't processed. For each bounced check you’ll get charged a fee and you might also be liable for the fees charged to the payee.
Do I get charged for a bounced check?
Yes, you do. The fees vary by bank but usually range from $25 to $35. To avoid being taken by surprise, check your account contract or give a call to customer service.
What happens if I wrote a check wrong?
If you realized your mistake before giving the check to the payee, just tear off the check and write a new one. If you already gave it to someone, contact them and your bank to fix the mistake before they deposit it. If they already deposited the check, it may bounce—and you'll have to follow your bank's recommended steps to fix the mistake.
What happens if you write a bad check that is over $500?
That depends. If it was unintentional and it isn't a frequent occurrence, the worst that can happen is getting charged a fee. Then, of course, you'll have to find the funds to process the transaction. However, intentionally and frequently writing bad checks over $500 can be considered a misdemeanor or even a felony in some states, if it's proven you have the intention to commit fraud.
Can you go to jail for writing a bad check?
If it was an honest mistake, no. Otherwise, probably. Generally, one can only face legal repercussions if there's a pattern of writing bad checks and intention to commit fraud. “The severity of the repercussions will largely depend on the severity of the fraud and how many times you have committed the fraud,” Michael says. Since laws in regard to check fraud vary between jurisdictions, consult a criminal attorney.