How to Handle Bad Checks

It happens to almost every PTA every year. A check for membership, spirit wear, or a fundraiser gets returned. Depending on what the check was for, the PTA can be left responsible for full payment on merchandise already received. Here’s how to handle bad checks.

Your PTA’s check handling policies should go in your PTA’s standing rules. Your policy should cover these key points:

  • All checks should have the name, address, and telephone number of the person signing the check so you can contact them if the PTA receives a bad check.
  • Require the check writer to pay a service charge in addition to any bank charges the PTA receives from a bad check.
  • Only accept checks with the current date. Pre- or post-dated checks often indicate that the check writer does not currently have sufficient funds in their account to cover the check, and different date does not necessarily mean that the funds will be there then.
  • If someone has written a bad check to the PTA, do not accept additional checks from them unless they have made a timely repayment of the check amount, bank charges, and PTA service charge. Everyone can make a mistake, and banks have been known to process checks faster than deposits. However, if someone has written a bad check but resolved the situation promptly, they deserve a little forgiveness from the PTA.

When your PTA receives a check back from the bank, contact the check writer by phone or e-mail, asking them to make good on the check and pay the bank charges and PTA service charge promptly. In many cases, this is sufficient to get the check writer to fix the problem. However, if this does not resolve the issue, your PTA may want to consider legal action, particularly if the check amount was significant.

In Illinois, bad checks are covered under the deceptive practice law. A person commits a deceptive practice in Illinois when they write a check that they know they don’t have enough money in the account to cover. As the party to whom the check was written, your PTA may infer that the person writing the check knew this if you attempt to cash the check on two occasions at least seven days apart. It is also a deceptive practice in Illinois if someone writes a bad check for more than $150 that doesn’t correct the situation within seven days of being informed that their check was declined.

If your PTA must pursue the legal approach, make sure you inform the person who wrote the bad check by certified mail and include the following information:

  • The date the check was written, the bank the check was from, the check number, the amount of the check, and who the check was made out to.
  • A request for repayment and additional charges (bank and PTA) within a set time frame.
  • A citation of the deceptive practice law regarding bad checks.

Keep a copy of the letter you sent as well as information regarding the PTA’s attempt to receive the funds through the bank and the check writer. If the issue remains unresolved, you can file a police report with your local department. The police may also direct you on how to file a case in small claims court.

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