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Non-sufficient funds (NSF) is a term used in the banking industry to indicate that a demand for payment (a cheque) cannot be honored because insufficient funds are available in the account on which the instrument was drawn.
If paying the item puts the account holder in a negative status by a relatively small amount, the bank may choose to honor the cheque. If the paying of the item would place the account quite deep in the hole, the bank will likely choose not to honor the cheque. The recipient may choose to report the writer to a database like Check Connection, TeleCheck, Shared Check Authorization Network (SCAN), or ChexSystems.
The reasons for receipt of bad cheques mostly has to do with the party issuing the cheque not having enough funds available in the withdrawal or checking-account. When a bad cheque is negotiated, the recipient of the check may choose to take action against the writer. In many jurisdictions in the United States, a Bad Check Restitution Program exists that allows recipients of bad checks to collect the funds from the local district attorney's office, regardless of the amount. Note that in some places, for a criminal prosecution on a bad check, there must be “fraud” involved. Carrying a higher balance in the checking account; that is to always have a "buffer" amount just in case an unexpected cheque does clear. Overdraft Protection - This may be in the form of a link to a savings account for which funds will be automatically transferred, a credit card, or a line of credit designed specially for this purpose. Despite consumer interest rates being at, historically, an all time low, many banks have moved from a community-investment based profit model to a customer fee based profit model. Banks, as trustees of their customers money, are also in the semi-unique position of being able to deduct fees from a customer's account directly, without permission from the account owner. In England and Wales, such cheques are typically returned marked "Refer to Drawer" - an instruction to contact the person issuing the cheque for an explanation as to why the cheque was not honoured.


Similarly, the phrase "Don't let your mouth write a cheque your ass can't cash." (alternatively, "cheques" or "body" (instead of "ass")) is used to mean "Don't make brash boasts you can't back up", and originates in Black English, being attested since the 1960s,[6] though it is today found more generally, as in the 1993 movie Dazed and Confused. The overdraft facility is an excellent financing option for business clients who are engaged in large projects and need to fund their cash flow. Keep building your business in a convenient, hassle free environment where you have easy access to your funds to keep your business running smoothly. The Boost is the second inflatable product line from Flysurfer Kiteboarding who believe that this new model has it all. In this video Andi Hanrieder from the Flysurfer and Flyboards Research and Development Team talks about the aims they had during the Boost’s development, delving in-depth into the most important features and high-performance innovations. The latest addition to the beloved Flysurfer SPEED5 line-up is finally here, the mythical 21.0m! In simplified terms, a cheque has been presented for clearance, but the amount written on the cheque exceeds the available balance in the account. When this occurs, the account will be overdrawn, and the fees charged by the bank will place an extra burden on the account until the overdraft is covered. This may lead to other merchants in the future refusing to accept checks from the writer or a joint account holder, or the writer having trouble obtaining a checking account at another bank for several years. But apart from this reason there are many other more minor reasons that cheques may not be honored. The action that is taken may be civil or criminal, depending on the amount of the check and the laws in the jurisdiction where the check is written. An agency run by the district attorney will pursue the writer of the check by attempting to collect the funds in exchange for avoiding criminal prosecution. Many banks do not utilize a readily accessible technology that verifies available funds before accepting a debit or cheque charge. Once this limit has been reached, it is typically the banks policy to deny any form of restitution, even in cases where the banks' fault is clearly demonstrable.


In many cases, this deduction may cause further pending transactions to fail, creating an 'overdraft cascade' - a situation in which the fees charged may be several magnitudes greater than would have been charged had the pending transactions been processed before the fees. This wording was brought in after a bank was successfully sued for libel after returning a cheque with the phrase "Insufficient Funds" after making an error - the court ruled that as there were sufficient funds the statement was demonstrably false and damaging to the reputation of the person issuing the cheque. If you’re a serious buyer, there are stacks of useful practical points wedged in here.
An NSF cheque is often referred to as a bad cheque or dishonored cheque, or more colloquially, a bounced cheque, cold cheque, rubber cheque, returned item, or hot check.
This is a civil matter with the holder's bank and not likely to be subject to outside reporting if settled quickly enough.
The amount of the cheque plus the depositor's bank's fee will be debited from the depositor's account. The check writer will be responsible to cover the amount of the check, plus all fees to which the recipient is legally entitled, plus a program fee. If a charge exceeds the available funds, most banks prefer to charge a fee that typically exceeds 10,000% of the cost of simply denying the charge. The instant, and often retroactive, nature of the fees lowers the account balance at the time the pending transactions are processed, creating an additional fee for each instance in which a transaction is attempted. The depositor then may choose to re-submit the cheque, hoping it will clear on a second attempt, or else proceed immediately with collection activities, civil or criminal.
The writer will also be required to take a course designed to improve check-writing habits. Normally, if check writer can cover up their bad credits in 60 days, all charges will be dropped.



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