A bounced check letter notifies parties that a check has been returned by the bank for insufficient funds. There are two types: one from the bank to both parties, and one from the recipient to the writer demanding payment. Writing bad checks is illegal and can result in criminal prosecution.
A bounced check letter is written correspondence that notifies a party that a check has been returned by the bank on which it is drawn for insufficient funds in the account to make payment. There are two types of bad check letters. A type of bad check letter is sent from the bank to the parties to the transaction, notifying each that payment on the check has bounced. The other type is a demand for payment letter sent by the person who received the check to the party who wrote the check, requesting that the party make alternative payment arrangements.
Checks are legal tender that can be offered as a substitute for cash payment. The law requires a check to be “good” or to be immediately cashable from the balance of the account from which the check is drawn. Bad checks or checks that “bounce” are rejected by the bank holding the account because there is not enough money in the account to cover the transaction. Writing bad checks is illegal and can result in criminal prosecution if the writer intends to defraud the other party. Civilly, anyone who receives a bounced check is authorized by law to request payment by alternative means from the check issuer, along with certain fees and penalties that are particular to each jurisdiction.
A bounced check letter is correspondence that notifies parties of the status of a check that the bank has declined for payment and requests action on it. There are two types of letters that are typically generated as a result of a bounced check. One type is official correspondence from the banks involved, notifying both parties of the transaction. The check writer’s bank sends a letter to notify you that the check was returned for insufficient funds and that, as a result, certain fees have been charged to your account. In addition, the party who received the check as payment and attempted to deposit it into their account receives a letter from their bank notifying them that the payment was declined and the amount was withdrawn from their available balance.
The other type of bounced check letter is a demand for payment sent by the party that received the check to the party that wrote it. This letter is used in the ordinary course of business to give the check writer an opportunity to pay the payment before taking legal action. The letter generally uses a standard format. It includes an initial statement that the bank bounced the check, a request for alternate payment arrangements, and a deadline date to receive payment. If the jurisdiction allows a fee to be imposed on bad checks, that fee will be indicated.
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