Accepting personal checks is an important part of conducting business in the world we live in today. Businesses or producers refusing to accept personal checks place themselves at a distinct disadvantage and are turning away potential profits. Unfortunately, the price a business or producer pays for accepting personal checks can sometimes seem to outweigh the benefits. No business or producer is exempt from accepting payment for goods or services by means of bogus or counterfeit checks.

There are a few simple steps that can be taken while accepting the personal check that can help in collecting money in the unfortunate event that the check is returned unpaid. When dealing with personal checks, the most important rule to remember is to not accept third-party checks, payroll checks, or checks written for more than the amount of the purchase. These three types of checks are common schemes that counterfeiters and forgers use to try to pass bogus checks. Checks should only be accepted from a named party on the check. Always verify identification to make sure that the person writing the check is a named party on the check and compare the signature on the check to the signature on the identification. You should also verify that the information printed on the check is accurate and collect additional information for your protection. It is recommended to ask for the writer’s home and business phone numbers. If the check does not have an address printed on its face you should get an address. In addition to the writer’s name, address, and telephone number, it is also advised to get the writer’s drivers license number, expiration of license, and date of birth. This information is helpful in the event that you must turn your check over to law enforcement to help collect payment.

Another item of which to be aware is the number of the check. Many law enforcement agencies advise that accepting checks on newly opened accounts has more risk associated with it than accepting checks on established accounts. Many businesses refuse to accept checks with a check number lower than 500 or 1000. When accepting personal checks written on a new account, it is advisable to ask to see two forms of identification and carefully review them to ensure that the information on the provided identification matches the person writing the check. Forgers and counterfeiters often have checking accounts under different aliases and identification to match each alias. The bottom line when accepting a personal check is to use good judgment and due diligence in determining if accepting the personal check is an acceptable risk. When in doubt as to the identity or character of the person presenting the personal check ask for an alternate means of payment.

No matter how careful you are in accepting personal checks, eventually you are going to receive a check back unpaid. The laws regarding the collection of returned checks are different from state to state and sometimes from county to county or city to city. Calling your local law enforcement agency is often a good way to find out what steps are legally acceptable in your community or state to collect a bogus check. Most jurisdictions will allow you to use the information collected at the time of accepting the check to contact the individual and ask them to take care of the bad check. If this is unsuccessful, you generally have three options available to try and collect on the bogus check. The first option is to hire a collection agency. This is often the most effective means of collecting a debt but it is also generally the most expensive. Most collection agencies will take a fairly significant percentage of all monies that they collect on your behalf. The second option is to turn the check over to your local law enforcement agency. This is often a very slow way to try to collect a bogus check and can result in additional requirements on your part if you must testify in court regarding the check. The last option is to personally sue the writer of the check either in small claims court or in a general civil court. Filing a small claims case generally does not require an attorney but does require the payment of court filing fees and the payment of a process server. The downside to trying to collect a bogus check through a court case is that it is easier to get a judgment against an individual than it is to actually collect the money granted to you by that judgment.

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