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The Curious Bag
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A hot check can cause problems for both the issuer and recipient of the check. Banks have different policies on handling hot checks, and punishment varies depending on the situation and the state.
Definition
A hot check is a check written with insufficient funds in the account to meet the amount. When the recipient tries to deposit or cash the check, the bank will not accept it.
Prevention/Solution
To avoid receiving a hot check, be sure the check has the correct date, a legible signature and a complete address. Also confirm the identification of the issuer.
Tips
The State of Texas warns that recipients should be wary of low series numbers, as "about 85% of all uncollected hot checks are new account numbers between 101 and 150."
Consequences
Writing a hot check is punishable by law with fines and possible jail time, depending on the state and the amount written.
Synonyms
Hot checks are also referred to as bad checks, bounced checks and rubber checks.
Source:
District Attorney Galveston, Texas: Hot Check Procedures
More Information:
Los Angeles County Department of Consumer Affairs: Bad Checks
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