Bounced check

Encyclopedia : B : BO : BOU : Bounced check

A bounced check is a check that is returned to the depositing bank because the owner of the account in the issuing bank has insufficient funds to cover the value of the check. In the United States, usually the check writer's bank and the other bank charge the check writer a penalty for the transaction.

In the United Kingdom banks and other institutions also charge penalty bank charges and in particular for credit cards the Office of Fair Trading has concluded that these charges are excessive. Indeed it is law in the UK that such penalties, Liquidated damages, may not exceed tha banks actual costs of informing the customer of the situation. In 2006 well over one million pounds has been recovered to date by individuals who have threatened court action. To date no bank has gone to court to try to defend their position.

External LInks

http://www.consumeractiongroup.co.uk

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