Every PTA that takes in money ends up having a check that was written to the PTA
returned by their bank for non-sufficient funds (NSF). When NSF checks are part of a fundraiser that includes merchandise, the costs can be significant as the PTA is liable for full payment on all of the fundraising products purchased. It’s important to have standing rules about how your PTA will deal with NSF checks.insufficientfunds20-1902x913

An Ounce of Prevention

The first step in handling NSF checks is to set up rules that help prevent such checks being written in the first place. Good policies to include are:

  • Only accept checks that include the name, address, and telephone number of the person signing the check.
  • Do not accept pre-dated or post-dated checks, only those with the current date.
  • Require those who write an NSF check to the PTA to pay an additional service fee to the PTA in addition to reimbursing the PTA for any bank fees associated with the NSF check.
  • Do not accept checks from people who have written NSF checks in the past and not corrected the situation in a timely manner. That correction should include paying the PTA service fee and the PTA’s bank charges.

Make sure that parents are aware of your PTA’s requirements for accepting checks. Consider including a copy of the policy in fundraising materials. Review all of the checks received prior to ordering fundraising products to ensure that the PTA’s policies are being met.

Handling the NSF Check

Even with good check acceptance policies, your PTA will likely still receive an NSF check every once in a while. In most cases, such checks are simple mistakes that can be handled quietly with a phone call or e-mail. You can contact the check writer’s bank to see if the lack of funds was a temporary problem. Let them know you have a check from the account that was returned for non-sufficient funds and that you want to know if the account now has the funds to cover the check. If so, have your PTA’s bank process the check again, and contact the check writer for payment of service and bank fees.

When the politely quiet approach does not work, your PTA may wish to consider taking legal action. In Illinois, the first step is to send a letter to the check writer by certified mail with return receipt requesting the check be made good. The request should include:

  • The check number, the date it was written, the amount of the check, the bank on which the check was drawn, and the person or organization the check was written to.
  • Request that payment be made on the NSF check and the additional bank and service fees within 30 days of receipt of the letter. Under Illinois law, failure to meet the 30 day deadline can result in the check writer having to pay triple the amount of the check, but not less than $100 or more than $1,500.
  • Cite the Illinois check deception law (Chapter 720—Criminal Offenses, Title III—Specific Offenses, Article 17—Deception).

There are numerous sample NSF check request letters available online. Keep a copy of the letter for your PTA’s records along with an additional copy to file with any legal action. If the check remains unpaid after 30 days, take the check, copy of the notice letter, and any other documentation to your local clerk of court. The staff there should be able to help you in filing a complaint.