Anyone Familiar with Check Kiting / Paper Hanging?
 

I have a client who has bounced 3 checks to date and upon receiving 3 replacements checks, I went to their bank to get them certified only to find out they yet again, do not have the funds. From the looks of the definition of check kiting / paper hanging, this is a criminal offense (the act of writing a check which the client knowingly will return as Non-Sufficient Funds).

I'm trying to find out if anyone has experienced this and on methods of check recovery services OTHER than the use of collection agencies. I'd rather avoid collection agencies on this issue and see if I have any alternative recourses as this does fall under the criminal code. I'm hoping the fact this is a criminal offence should be sufficient to get this deadbeat to pay up.

Anyone have suggestions?

Thanks
WG

Sorry, I can only tell you about the American laws regarding this.

can the bank put the checks on "bank collection" for you? say for a 30-60 day period, so as soon as funds come in, you get paid first...

I went in to the client's bank to speak to their manager about it and they wouldn't do a thing. They wouldn't contact the client, tell me if I could somehow get them certified when the funds came in, nothing. Quite honestly, I was surprised TD was allowing this but considering they charge $25 - $40 per bounced check, I can see why they'll defend their clients, they're directly profiting from my losses.

WG

Question 1: Are they paying you for hard goods or contracted services? Hard goods obtained with a bad check would be theft. Contracted services tend to go into a more civil rather than criminal issue.

The checks themselves is a questionable call. You might want to contact your local police and see what they have to say, although I suspect they will tell you that you need to deposit the checks and have them bounce before they can do anything. Even then, I am not sure that it would be you but rather than bank that would have to raise the issue.

1) Service provided. I'm not sure why a service is different than a product, I thought the criminal issue is the act of writing a check that knowingly will be returned NSF.

2) Three of the checks have already bounced. The replacement three have not bounced, but could not be certified when I went to the issuing bank (ie: it would bounce if i deposit them).

WG

It's not a criminal offense, at least here in the US. You've basically extended them credit so it's a civil matter.

Now, on the otherhand if they bought something like a car from you and the check bounced, then sure it would be criminal issue.

Wired Guy want to go 1 on 1 in a camchat with me?

You could just take them to court. That doesn't gauruntee you will get your money though either if they don't have it. Of course if they have some sort of steady job you could garnesh their wages after getting judgement.

and did you do the "contracted services" before or after receiving a check?

That's what I'd like to avoid, the cost of litigation would easily bring this up $5-10k and if he won't pay this, i'm going to have a bitch of a time collecting on a judgement.
WG

if you have more than one, deposit one into his account and then cash the other

Can I fonddle your penis?

WG, sending a check on bank collection is done from 'your' bank and not theirs - meaning, your branch manager has to initiate the 'collection' normally, on the bounced checks you have. If you've sent those back to him, you will have to deposit them again, have them bounce and then ask your bank to send them on collection. Just note that it will take 30-60 days and most likely cost you another $ 40 per check they collect + the NSF fees per check. It's your best bet other than going to his office and getting the cash for it.

As the funds come in to cover each check you will be paid the amounts of the checks.

Well KNOWINGLY is the keyword... what is their bank is holding funds or someone mistakenly moved funds to another account. Just make sure they are being criminal first.

In the US you'd go to the police who had jurisdiction over where the checks were written. I had my ex tossed into jail for writing me a bad check - anything over $500 in GA is a felony. Start with your local PD (or mountie or moose, or whatever you folks have up there in your igloos ;) )

Three bounces over three months and when I went to certify the replacements, the clients bank told me they couldn't (ie: the funds aren't there to certify them with). I think anyone would agree 6 checks is more than enough to prove knowledge and not carelessness.
WG

Wow, I've never heard of this before. I do have the original 3 checks that are marked NSF - Not to be cashed unless certified. I still have these 3 checks plus the replacement three. So if I go to my bank, they can someone attempt to collect on the original checks? I don't mind waiting as interest is accruing, but what is the likelihood of succeeding on collections? According to his bank, the funds aren't there so what can my bank do to collect?

WG

Was the charge you brought up against your ex for check kiting as well or was it for something different?
WG

I believe deliberately writing a bad check and not making good on it within a certain time frame is a jailable offense in a lot of places. I worked as a bill collector briefly and there was one grocery store client who routinely swore out warrants on even the smallest checks, if people did not make good briskly.

Check kiting is writing a check before the funds are available, when they are going to be available soon. It is technically illegal, but writing a straight up bad check is a more serious offense.

You can probably find out what is needed to swear out a warrant by calling the City Hall for where the bad check writer lives.

If the dough is eventually in the account, then you can collect. If they are always broke, you are just out more bank fees.

The only way I can imagine is to go each day to his bank trying to certify the funds which is a huge waste of time. I like Trixxia's idea, but I don't know if my bank (RBC) can offer such a means to collect, I thought this is something collection agencies would do, not my bank.
WG

Gosh, this was 20+ years ago - I can't remember :(

Here's a page I found on GA law that gives some info:

http://www.lawdog.com/states/ga/checks.htm

Basically it looks like GA considers it wrong if they don't pay up - period. And the amount depends on if it's a misdemeanor or felony. Either way, you get what you're owed plus fees here.

not sure how you mean..

here in texas you simply call the police and they will go arrest them ..

but this is physical things not a service but i would think it would work the same way

i guarantee that any police department or government agency will not consider writing 3 bad checks "check kiting"

the check kiting/paper hanging laws were put into effect to curb more widespread uses of this practice, such as Frank Abagnale, the master of the art

Contact their local law enforcement.... Actually their local district attorneys office. Have an investigation opened. They will check with the bank for this:

Was the money in there the date the check was signed for? If they gave you the check with the date of July 8th, 2007 and there was no money in the account on that day, they are screwed. It is illegal to write a check with no money in your account with the intent of placing the money in the account on a later date.

In other words they need to have money in the account on the 8th. If not, they are in violation of the law. Now normal people do this all the time. But if they do this regularly and to other parties, they will certainly go to jail.

Most banks have a number you can call to verify a check. If his bank does you can call that everyday instead of going down there.

WG, sorry didn't come back to check. Actually, all Canadian banks offer it. For the most part, it's businesses that use this service but you can definitely ask your bank manager to send the checks on collection. It's basically like standing in line everyday at their bank and waiting until they deposit and hoping it's enough to cover one of the checks - once they do, they send you the money.

I'm not sure what the amounts total to, but you can contact your local police or the RCMP tomorrow - (depending on what it what the entire story is, it may fall into the cybercrime fraud department). If not, call your local police and ask for the fraud department. I would call for info but still go the bank collection route. (you'll probably get your cash faster)

Also, if my banking memory serves me correctly - kiting refers fraudulently getting CASH based on the float (or time it takes for cheques to clear). NSF cheques don't fall into that category *unless* he used you as a check cashing service.

In the US (according to Wikipedia) you can attempt to this to collect the funds:
http://en.wikipedia.org/wiki/Non-suf..._on_Bad_Checks

this is what i was referring to in my original post, but you explained it much better Trixxxia...

Do you happen to know what the name of this service is (of the bank trying to cash it every day)? I definitely want to pursue that option but not sure how to ask for it at my bank.

Thanks Trixxia!!
WG

Try calling Frank Abignale Jr.

Charles, you just tell your bank that you want the cheques sent on collection (that is the actual term for it). They should then take care of sending them out to the other bank for you. Once the other bank has them they will hold them for a set period of time (I think it's 30 days) and check the account daily for funds. If at the end of the time they are still not good the other bank will return them stating such. I'm not sure what the current fee for this is but at least it's a way of trying to get the funds without you having to check daily yourself. If they still come back "NSF" then you should go to the police to see about filing fraud charges

good luck

Thanks for the help, I never knew the banks offered such a service. Much appreciated for the help everyone.
WG

WG - Yeah every bank/branch offers this service - I just called my bank to make sure the term is right, and it is considered 'On Collection'. My branch says that the Payee bank holds it for 10 days but I'm almost sure it was more (this girl wasn't 100% sure cuz she's never done it) but the term is 'On Collection'. Just go to the original bank/branch that you deposited to, hopefully you've kept the voucher and all, then ask them to send it 'On Collection'. If they don't know what you're talking about, talk with the branch manager - he/she should know.

I hope that helps.

This is Rat shit.