Every business or organization receives a bad check from time to time. Often the people writing these checks do not realize they don’t enough funds to cover the amount. This is a common error that many individuals experience at some point in their life. In other cases unscrupulous individuals are just trying to pass a bad check to get something for nothing. In either case, a business owner or company accountant will need to follow up with these returned checks to ensure payment is received.
- Call the Account Holder
The first step when dealing with a returned check is to call the person who wrote it. This is a great reason to have people write their telephone numbers on their checks. For individuals who have mistakenly written a bad check, this phone call may be all that’s required to collect payment.
- Send a Certified Letter
If the phone call does not settle the collection, the next step is sending a certified letter. In the letter let the customer know the amount of the check, any fees charged by the bank, and the date by which you require payment. It is important to get a return receipt to prove the letter was received by the intended recipient. This step is a necessity if things are to escalate to small claims court.
- Contact the Bank
Before attempting to cash the check again, contact the back it is drawn on. Tell them you hold a check that was returned and let them know the dollar amount. Ask if there is enough money in the account to cover the check, if there is, you can take the returned check to the bank and cash it. In some cases the bank can enforce the collection and automatically draw the money out when a deposit is made, the cost and availability of this feature vary between financial institutions.
- Legal Measures
If nothing else has worked, the only option is to involve the law. Contacting the local police department or district attorney’s office is the first step to requesting prosecution. This typically requires you to send a written notice to the check-writer. From here the law enforcement can attempt to collect the debt.
- Sue in Small Claims Court
The last option is to take the matter to small claims court. This option is costly and time consuming, but could potentially net an amount larger than the check’s total. Every state’s laws are different, so it is best to consult a lawyer before perusing this type legal action.
Alternatively you can contact Global Check Recovery to handle your returned checks. Our free NSF collection service can save you the hassle of steps two through five. Contact us today for more info.