Personal Finance

NSF Cheque Repercusions

  • Last Updated:
  • Jan 20th, 2006 12:13 am
Tags:
None
Sr. Member
Jan 11, 2005
501 posts
1 upvote
Toronto

NSF Cheque Repercusions

Hi,

I do apologize for asking this as I am sure it has been answered on RFD before... but I can't seem to find a firm answer as to who get's charged the NSF fee... but does anyone know who get's charged in this situation... Someone wrote a cheque to me, which I had just found out was returned... it looks like they didn't have enough funds. Do I get charged the NSF fee... because I tried to cash a bad cheque... or does the other side get charged?

Also will this affect my credit rating? Logic would seem that I would be unaffected... as I wasn't the offender... and that all of this would happen to the other side. could someone let me know?

There must be some impact to me???... as someone could routinely/purposely try to cash bad cheques into his/her own account.
15 replies
Deal Fanatic
User avatar
Sep 7, 2003
7283 posts
250 upvotes
Edmonton
deal_lurker wrote:Hi,

I do apologize for asking this as I am sure it has been answered on RFD before... but I can't seem to find a firm answer as to who get's charged the NSF fee... but does anyone know who get's charged in this situation... Someone wrote a cheque to me, which I had just found out was returned... it looks like they didn't have enough funds. Do I get charged the NSF fee... because I tried to cash a bad cheque... or does the other side get charged?

Also will this affect my credit rating? Logic would seem that I would be unaffected... as I wasn't the offender... and that all of this would happen to the other side. could someone let me know?

There must be some impact to me???... as someone could routinely/purposely try to cash bad cheques into his/her own account.
Both of you will get charged a fee, the person who wrote the NSF will of course be charged more, but you still get dinged.

Won't affect your credit rating at all, since you didn't write the bad cheque.
Deal Addict
Nov 18, 2004
2690 posts
4 upvotes
Toronto
Hellfire wrote:Won't affect your credit rating at all, since you didn't write the bad cheque.
what if someone has written 1 NSF cheque, will that affect his/her credit rating negatively :o ?
Deal Addict
User avatar
Jul 2, 2004
2301 posts
GTA
IIRC, the person that writes the NSF cheque will get charged the fee ($30?). If they keep doing it, their credit rating will be affected.

The receiving party will not get penalized for the cheque, but they are expected to cover the amount of the cheque.
Deal Addict
Apr 12, 2005
1315 posts
145 upvotes
north77 wrote:IIRC, the person that writes the NSF cheque will get charged the fee ($30?). If they keep doing it, their credit rating will be affected.

The receiving party will not get penalized for the cheque, but they are expected to cover the amount of the cheque.
The receiving person/account will be charged for NSF fee because I knew my friend had written a cheque from one of his own account and deposited to his other account at a different bank. But because the money in his first account wasn't available yet(on hold), his cheque was returned(not cleared). The only NSF fee charged was his second account(the account which he deposited the cheque into).
Deal Fanatic
User avatar
Sep 7, 2003
7283 posts
250 upvotes
Edmonton
Agent_J wrote:what if someone has written 1 NSF cheque, will that affect his/her credit rating negatively :o ?
One NSF is not a problem, it happens to the best of us... but do it multiple times it will affect your credit rating.

$25 - $30 is the standard charge for the person who writing a NSF cheque, and the person who deposited the cheque generally gets charged anywhere from $4 - $20. Usually just to cover the interest the bank loses for giving you the money and then having the cheque not cleared, but its a big spread and really depends on who you bank with and your history with em.

Also, if you are repeatly deposting cheques that are NSF the bank will probbly but longer holds on your deposits.
[OP]
Sr. Member
Jan 11, 2005
501 posts
1 upvote
Toronto
I am going to the bank late today.... to figure out what exactly will happen now... It's kind of a drag since it isn't always convienent for me to do that.

I called the person late last night (who wrote me the cheque)... and now they claim it was a stop payment... does that make a difference for me? Will I get charged a fee? I know that if they did a stop payment on the cheque to me... that may not be as bad (for them as an NSF)... but still I am out the money they owe me :mad: .

Luckily I still had enough money to cover the bad cheque... it would have caused a chain reaction for me (of bad transactions) if I didn't have more money
in the account.

If I get affect it's just seems not fair as I did nothing wrong. :(
Deal Addict
Nov 21, 2004
1609 posts
67 upvotes
Banks used to call them NSF fees; now they call them "Dishonored Cheque Fees" so that things like stop payments and what not can be fee'd. SO, long story short, your bank will still charge you a fee because they had to do the paperwork.

Whether he is lying or not on stopping payment (rather than be embarrased about bouncing a cheque), you need to figure out what to do to get your money. Threaten to have them charged with fraud if you have to. You can call the police and have them charged, stores do it all the time. The one thing you have to be careful about is negotiating repayment. Once you start that process, it becomes a matter of bad debt rather than fraud.

edited to include: PS: He should pay you back any fees your bank has charged you.
[OP]
Sr. Member
Jan 11, 2005
501 posts
1 upvote
Toronto
Just by renaming the fees to 'Dishonored Cheque Fees'... that's a really sneaky way to charge a person (who is done nothing wrong and had no control over the situation) some fees.

Anyhow... I just got back... from the BMO branch.... as it is not my home branch... they had no clue as to what had happened (ie if the bounce was due to an NSF or stop payment). They said I should contact the home branch for details.

They claimed I wouldn't be charged anything... but after looking at other RFD posts there seems to be still some confusion as to whether or not the actual person depositing the cheque will still be charged... even on this thread (and others)... some say I will and others say I won't. When I have time I will call the telephone banking and ask a rep. for the final scoop on who get's charged and what else is affected.

Aside from any 'Dishonored Cheque Fees' that I may (or may not) be charged, the problem is that my balance went under the minimum for getting my monthly banking plan fee waived... so I will be charged something because of the bad cheque I got.

Yes, I will have to find a way to get the funds I am owed... I don't think I should be calling this fraud yet... because I have dealt with them before... I usually accept cash and never a cheque... I will let you know what happens and what the final scoop is... on whether or not the victim also gets dinged with the 'Dishonored Cheque Fees'.

dl

BobW wrote:Banks used to call them NSF fees; now they call them "Dishonored Cheque Fees" so that things like stop payments and what not can be fee'd. SO, long story short, your bank will still charge you a fee because they had to do the paperwork.

Whether he is lying or not on stopping payment (rather than be embarrased about bouncing a cheque), you need to figure out what to do to get your money. Threaten to have them charged with fraud if you have to. You can call the police and have them charged, stores do it all the time. The one thing you have to be careful about is negotiating repayment. Once you start that process, it becomes a matter of bad debt rather than fraud.

edited to include: PS: He should pay you back any fees your bank has charged you.
Deal Addict
Jan 19, 2005
3102 posts
346 upvotes
I think it's just the depositor who gets dinged. Imagine a cheque was written from an account which has been closed. How will the bank charge the person who is no longer a customer?
Deal Expert
User avatar
Jun 14, 2003
23140 posts
173 upvotes
recordman wrote:I think it's just the depositor who gets dinged. Imagine a cheque was written from an account which has been closed. How will the bank charge the person who is no longer a customer?
Both will be charged. Of course, if a person wrote a cheque from a closed account, he will not be charged by the bank. However, he may break some law.
Jr. Member
Feb 17, 2005
160 posts
Several things:
1) in the future go to the branch that the check is issued from (written on the front) and ask the teller to certify it. You will pay a few bucks but you will find out right away if there are funds to cover it.

2) if you know the manager at that branch, you can request nicely and via a letter that he/she tries to clear the check again once funds become available. This used to work, not sure if it still does.

3) you can discuss with your branch manager and explain the situation, and he/she will be able to waive the monthly fees assuming you're a good client.

4) any future dealings with this individual should be done ONLY with a certified check or money order, until you feel comfortable that he will not scam you again. It is possible, however, that this was a one time honest mistake. In which case he should have presented you right away with a replacement check.
Jr. Member
Feb 17, 2005
160 posts
The fee you will be charged for a dishonored check most likely depends on the type of account you have.
This charge appears on your statement.
CIBC biz acct charges me $5.
...which I charge back to the customer who bounced the check.
Newbie
Feb 26, 2002
81 posts
1 upvote
Toronto
Why a cheque you deposit may be returned by another bank:
  • Payment Stopped: The owner of the account from which the cheque is drawn from, has requested that the cheque not be paid
  • Postdated: Date on the cheque is in the future
  • Stale Dated: Date on the cheque is 6 months or older
  • Account Closed: The account from which the cheque is drawn from is closed
  • Funds Not Cleared: A "hold" has been placed on the funds in the account the cheque is drawn from
  • Materially Altered Cheque: Cheque has been altered without authorization
  • Counterfeit Cheque: Owner of the account from which the cheque is drawn from denies issuing the cheque
  • Returned Cheque: Written and numerical amounts on the cheque do not match
Who pays - Cheque and Payment Processing Service Fees:
  • Certified Cheques:
    At your request: $10-20 (You certify your own cheque at your own bank and then give it to a third-party)
    At holder's request: $15-25 (You certify the cheque you received from third-party at their bank)
  • Stop Payment: $12.5 - 25 (Depends on how much details you provide about your cheque)
  • Cheque or other debit returned on your account due to the above: $20-40
  • Cheque or pre-authorized debit deposited and subsequently returned: $0 (no charge) (from third-party items)
  • Collections: $20-100 - A cheque returned (see above) can be put on collections and sent to bank from which the cheque is drawn from. The bank checks the account daily for the funds for up to 30 days
The above charges only apply to personal accounts and vary from bank to bank.

Should you continuously deposit cheques that get returned, your bank will place "holds" on your deposits to avoid you from overdrawing your account and having your cheques from being returned NSF. In addition, the bank may chose to close your account to avoid any future losses and administrative costs. In any event, your credit rating will not be impacted, simply your relationship with the bank.

On the other side of this transaction, should you continuously write cheque without having sufficient funds in your account, you bank will chose to close your account. At this time, your credit reporting will not be affected, simply your relationship with the bank. The banks are looking to add comments to the credit bureaus in such cases to inform other institutions of potential risks (NSF, cheque kiting, empty envelopes, etc). This has not happened yet and no agreements have been signed with the banks and the credit reporting companies.
[OP]
Sr. Member
Jan 11, 2005
501 posts
1 upvote
Toronto
Thanks for everyone's info. I finally received the money I was owed. I never went to the bank to find out about the 'Dishonoured Cheque Fees' yet... but from what they told me before... the other end will be charged. I assume this is the case... but when I get a chance... I will double-check... It could appear as a month-end fee (though I doubt it... as I think they would have charged against my account instantly).

I am just glad I got my money back :!: .. no more cheques for me :mad:
× < >

Top