Bad Check acceptance and eligibility

ACCEPTANCE TIPS

The best way to reduce your losses is to avoid taking bad checks from the start. The following tips are suggestions to help you establish good procedures for accepting checks.

·         Institute a check acceptance policy.
A clearly posted check acceptance policy for your employees and customers can go a long way toward reducing your losses. Policies should state which types of checks can and cannot be accepted and include the consequences to bad check writers.

·         Confirm the identity of the check writer.
All I.D. can be forged. The most reliable form of I.D. is that which contains a photo and a physical description. Take the I.D. in hand and write the I.D. number, birth date, address and other descriptive data on the front of the check. Ask questions. If the I.D. does not belong to the person writing the check, they may be thrown off guard.

·         Whenever possible avoid accepting checks written on a new account.
Approximately 85% of all bad checks are written on accounts only a few months old and bear check numbers between 101 and 150. Use caution. Do not accept counter drafts.

·         The signature should be legible and signed in the presence of the individual accepting the check.
Do NOT accept previously signed checks. For a company check, it is vital that the signature is legible. If not, print the individual's name on the front of the check.

·         The complete address should be imprinted on the check.
Require a street address, in addition to a P.O. Box number. Obtain a phone number as well.

·         Accept checks only written with today's date.
Pre- or post-dated checks are not accepted in the Bad Check Recovery Program and cannot typically be criminally prosecuted. This restricts any recourse you may have against the check writer if your own collection attempts fail.

·         Make sure written amounts and numbers correspond.
Banks will not honor checks with discrepancies between written amounts and numbers.

·         Avoid accepting checks drawn on an out-of-state bank.

 

 REMEMBER, you are not required to accept a check from anyone.
If you feel uncomfortable or suspicious, trust your intuition!
Ask for another form of payment.


How to determine a check's
eligibility for the program.

A check is Eligible if...

  • The amount is no more than $5,000 (or multiple checks do not exceed this limit).
  • There are no minimum dollar restrictions.
  • The check was received in Kosciusko County, deposited in a bank in exchange for goods or services and was presumed "good" at the time of acceptance.
  • A photo I.D. (driver's license, state identification card) with the required information was recorded at the transaction.

A check is Ineligible if...

  • It is post-dated.
  • Both parties knew there were insufficient funds at the time of transaction.
  • It is a two-party, stop payment, or payroll checks.
  • The identity of the check writer is unknown.
  • There is no amount, date, or signature on the check.
  • The numeric and written amounts on check do not match.
  • The check involves an "extension of credit" or was payment on an account.
  • The check has not been processed by a bank.
  • Check written as repayment of loans or pursuant to civil contract.

 

Checks ineligible for the Kosciusko County Prosecuting Attorney Bad Check
Recovery Program may be pursued via small claims court
or by a private collection agency.