CHECK BOUNCE NOTICE

A notice of a bounced check, also referred to as a check bounce notice, is a document provided by a financial institution or bank to an individual who has written a check that was not paid due to a lack of sufficient funds in their account or other factors like a closed account, a request to stop payment, or an inconsistency in the signature.

A check will not go through if the person writing the check has insufficient funds in their account. This is known as a bounced check. Other issues with the account or the check may also cause it to be returned. When the person receiving the check attempts to deposit or cash it, the bank will not honor it and the recipient may have to pay a fee. The recipient can then send a notice to the person who wrote the check, telling them about the situation and requesting payment for the bounced check and any additional fees incurred.

ELEMENTS OF CHECK BOUNCE NOTICE:

A notice of a bounced check generally includes these components:

The day on which the notification was released is referred to as the date.
Details of the recipient: The title and location of the individual or organization that was intended to receive the dishonored cheque.
Verify details: Confirm the check’s number, date, and the amount of the check that has been returned due to insufficient funds.
The cause of the return: The explanation for why the check was sent back, including reasons like insufficient funds, a request to stop payment, or the closing of the account.
Details about the bank: This includes the bank’s name and location, along with the amount of the charge that the bank assessed for returning the check.
A request for the payment of the bounced check amount along with any extra charges that resulted from it.
Ramifications of not paying: A declaration outlining the potential outcomes of failing to make payment, such as legal repercussions, and the time limit for resolving the matter.
Details for communication: The individual or group responsible for distributing the notice should provide their name and contact details, along with guidelines on how to reach out to them to address any concerns.

It is crucial to recognize that the contents of a notification about a bounced check can differ based on both the location and the specifics of the check that bounced.

TYPES OF CHECK BOUNCE:

There are different kinds of check bounces, such as:

Insufficient funds is the most typical form of check that bounces, and it happens when the balance in the account is not enough to cover the check’s total amount.
If the bank account linked to the check is no longer active, the check will not be cleared.
A check is considered stale when it is presented for payment after a specific amount of time has passed, and the bank might decline to honor it.
A post-dated check is a type of check that is written with a date in the future. If it is cashed before that date, it will not clear.
If a check has been changed or faked, the bank may decline to accept it.
If the holder of an account requests that a payment be stopped on a check, the bank will refuse to make payment if the check is presented.
If the account mentioned on the check is not real or does not exist, the check will not be valid and cannot be processed.

It is crucial for both the person who writes the check and the person who receives it to be mindful of the potential consequences, as different fees and penalties may arise from each of these various types of bounced checks.

HOW TO MAKE CHECK BOUNCE NOTICE?

If you want to create a notice for a bounced check, then you should adhere to the following instructions:

Acquire the needed data: Obtain all pertinent details regarding the returned cheque, such as the cheque number, date, and value, the reason for the bounce, the name and location of the bank that rejected the cheque, and any incurred bank fees.
Find out the debt: Compute the complete sum of money that is owed, comprising of the amount from the failed check and any extra charges accumulated due to the failed check, like bank fees and handling fees.
Create a formal notice that contains all the necessary information about the returned check, including the reason for the return, the amount owed and any deadlines or repercussions for non-payment, utilizing word processing software. It is vital to maintain a professional tone and provide precise details about the action required.
Transmitting the notification: To confirm that the intended addressee receives it, forward the notification through certified mail and request a return receipt. It is also possible to transmit the notice through email or fax but it is recommended to follow up with a hard copy mailed by post.
Make sure to document: Retain duplicates of the notification and any associated paperwork, such as evidence of mailing or delivery, for your own records. This could prove to be helpful if legal action becomes necessary down the line.

It should be acknowledged that the exact procedures for issuing a notification of a bounced check could differ based on the location and the situation surrounding the returned check. Therefore, it might be wise to consult with a legal expert if there are any uncertainties or apprehensions.

DOCUMENTS REQUIRED:

The original cheque that was returned by the bank along with a memo indicating the reason for the return.
A duplicate of the official notification that was delivered to the person who wrote the check.
A duplicate of the receipt from the postal service, courier, or confirmation of delivery for the legal notice must be provided.

COST AND TIME INVOLVED:

The price and duration associated with issuing a check bounce notification can differ based on a variety of factors such as the mode of delivery, bank fees, and legal costs. Typically, the cost of sending a notice using registered mail or courier service can vary from Rs. 50 to Rs. 500 depending on the location and how urgent the delivery is. When it comes to the time frame, the urgency of the issue may influence it, but it is commonly suggested to send the notification within a month of receiving the bounced check.

ADVANTAGES:

Sending a notification of a bounced check can be a useful tactic to retrieve payment from the check writer. This can compel them to pay what they owe or face potential legal consequences. Moreover, it can establish a written record of correspondence and indicate your attempts to handle the situation in a businesslike manner.

DISADVANTAGES:

Notifying someone about a bounced check can also have drawbacks, including the expenses and time associated with sending the notification and pursuing legal action if needed. Furthermore, there is no assurance that the person who wrote the check will reply or pay the outstanding sum, and it may be necessary to take legal action to recover the debt.

LEGAL REQUIREMENTS AND RULES:

As per the provisions of the Negotiable Instruments Act, the issuer of a bounced check must be notified within a period of 30 days. The notice should include specific information as listed below:

Date of issuance of the notice.
The recipient’s personal information, including their name, address, and ways to communicate with them.
The bank that sent back the check’s name and location.
Reason for the return of the check.
The sum of the check that has bounced and any extra fees accrued.
Demand for payment of the amount owed.
A notice has been issued and if payment is not made within 15 days, legal action will be taken.

To ensure documentation, a duplicate of the communication must be retained, and the notification itself should be sent utilizing either registered mail or a courier service with confirmation of receipt requested.

In case the individual or organization who issued the check does not make the payment within 15 days from the date of receiving the notice, the recipient has the option to take legal action under Section 138 of the Negotiable Instruments Act. This section makes the issuer of a dishonored check criminally liable. However, the recipient must file the complaint within 30 days after the 15-day period, and the complaint must include both the original bounced check and the memo of return.

It is important to note that the specific legal requirements and rules for a check bounce notice may vary depending on the jurisdiction and the circumstances of the bounced check, and it may be advisable to seek legal advice if you have any questions or concerns.