Bad Check Laws - Penalties for writing bad checks

by Thomas Vargo

If you write a bad check, otherwise referred to as NSF checks, bounced checks, rubber checks, insufficient checks and bogus checks, you should be aware that writing fraudulent checks can come with both civil and criminal penalties, such as possible jail time and fees.

There are some NSF checks, or bad checks that are usually not considered fraud and are normally exempt from be punishable by bad check laws. Section 3-104(2)(b) of the UCC, defines a check as "a draft drawn on a bank and payable on demand". The first type is a postdated check, since it is not payable on demand, is usually considered, by most states, that the writing of a post-dated check is not a fraudulent act and is not punishable under bad check laws. The second type is the writing of a bad check if they are used to pay a past or ongoing debt, such as a note payment or invoice. However, if you give a creditor a NSF check or bad check for a COD order, then would be considered to be within the bad check laws.

The party that is normally found guilty, under bad check laws, for passing a fraudulent check is the individual who signed the check, however, the person who knowingly passed it on, or a third party who endorsed the check and passed it on to another party can also be found guilty.

If you have written a bad check and it is returned NSF (non sufficient funds), the best course of action to avoid possible criminal and civil penalties is to immediately contact the individual or company that the check was issued to, and make arrangements to pay them.