Q:

What is the definition of a dishonored check?

A:

A dishonored check is defined as a check that has been presented to a banking institution for payment and has been returned to the depositor due to insufficient funds. Dishonored checks are also referred to as bounced checks or returned checks.

Dishonored checks occur for a variety of reasons. In many cases, an individual simply miscalculates his checking account balance and unknowingly writes a check for an amount that exceeds the balance. Alternatively, there are also cases in which an individual intentionally attempts to cash a bad check in order to receive cash that is not rightfully his. Many banks provide customers with what is known as a "shadow balance," a secret line of credit that is determined by the bank that allows for payment of over-drafted checks at the bank's discretion.


Is this answer helpful?

Similar Questions

  • Q:

    How do you change a debit card PIN number?

    A:

    To change a debit card PIN number, customers must contact their banking institution by phone or in person, and verify their identities through a series of security questions. Once the customer's identity is verified, he or she will be instructed to enter a new PIN number into a bank keypad or their telephone keypad. There are also some banking institutions that allow their customers to change their debit card PIN number online.

    Full Answer >
    Filed Under:
  • Q:

    How long is a check valid for?

    A:

    Checks generally do not have expiration dates, and banks may cash checks even if they were written more than six months in the past. However, banks have the option to honor or dishonor a check more than six months old.

    Full Answer >
    Filed Under:
  • Q:

    Can I stop payment on a money order?

    A:

    The ability to stop a money order depends on the policy of the store or bank that issued the money order. Rules vary depending on the establishment, and the purchaser may face a large fee to cancel the payment and receive a refund.

    Full Answer >
    Filed Under:

Explore