When Can a Bank Dishonor a Check?

Your bank can dishonor a check for many reasons.

Writing a check these days does not seem as necessary as it used to be, with the onset of electronic transfers. Banking has become far easier due to the Internet and many people now prefer direct debits. However, some people still need to write checks, knowing they will be honored.

Insufficient Funds

A bank has a duty to honor any check unless the account from which the check was written has insufficient funds to cover the amount. When a person writes a check they are asking their bank to pay the amount on the check as a sign of good will that the money is covered. If there are insufficient funds the bank will "bounce" the check and charge a fee to the account holder.

Stale Checks

A stale check is usually signified as a check that is older than six months. Many banks will still honor a check after the six month period but they are not obliged to do so.

Insufficient ID

If you go to the bank to cash a check and you have insufficient proof to suggest you are the legal payee, the bank is within its rights to refuse payment. This is mainly to protect the account holder against fraud.

Death

In the event that the bank is notified of the death of the account holder, the bank can refuse to honor a check. They may honor any checks until they are notified of the deceased's passing.

References

• Raidercast: banking