PTO How-To: Handling Bad Checks
Parent groups deal with a lot of checks, and eventually you’re likely to get one that bounces. Follow these steps to handle an insufficient funds check.
Contact the person privately. Start with the assumption that this is an honest mistake. In the vast majority of cases, that will be true. Never threaten to tell others, such as the person’s employer, about the bad check. Such threats are rarely helpful and may be illegal.
Send a letter. If you are having trouble getting payment, send a certified letter, return receipt requested. State the check number, date, and amount, the bank it’s drawn from, and who the check was written to. Set a date when payment is due (10 days is standard). Site your state’s check deception law. Keep a copy of the letter for your records. (Download an editable bounced check letter from the File Exchange.)
Contact the bank. Banks often will tell you whether an account has sufficient funds to cover a check. You might be able to put the check through a second time and receive payment.
Take legal action. If the person refuses to pay, you may go to small claims court or notify the police. In most states writing a bad check is a misdemeanor. In either case, your certified letter provides important documentation.
Check Dos and Don’ts
Do require contact information on all checks.
Don’t accept postdated checks.
Do set a service charge for handling bounced checks.
Don’t accept checks from people you’ve had trouble with in the past.
Do review checks to make sure they’re complete before depositing them.
For more tips, read “Dealing With Bad Checks” in the ptotoday.com archives.
Originally published in 2010 and updated frequently.
