Anybody can accidentally cash a bad check, and it won't result in a crime or any punishment, although you will incur a fee to your bank. But if you knowingly cash a bad check you may be charged with theft and could face jail time.
It's not a crime to accidentally cash a bad check, but if you cash a bad check knowing the funds are not available, you may be charged with a misdemeanor or a felony.
What Is a Bad Check?
A bad check is a check cashed when the person who wrote it doesn’t have adequate funds in their account to cover the check amount by the time it clears. Sometimes called a bounced check, but officially an NSF (nonsufficient funds) check, a bad check will be returned to you by the bank.
What Happens if You Cash a Bad Check?
If you cash a bad check you've received from someone else, you'll owe your bank a fee for returning the check and will have to try to recover the money you're owed from the other party. If you cash a bad check you have written to yourself, you'll owe your bank an NSF fee, which varies depending on the bank's terms and conditions. Intentionally cashing a bad check can be classed as a misdemeanor or a felony. A misdemeanor usually carries a sentence of one year or less, while a more serious felony can result in a prison sentence of more than one year. If you knew the check was bad when you wrote it, you could face a criminal charge and also have to pay restitution. In most states the crime is treated as a misdemeanor, and in states that distinguish between a felony or misdemeanor, the amount of the check is a deciding factor. For example, in Tennessee the punishment for a bad check not over $100 is 11 months and 29 days in jail or up to a $500 fine, or both; if the amount of the check is over $100, the punishment can be three to 10 years in jail.
Whether it is a first offense is also a factor. For example, a bad check crime treated as a misdemeanor in Colorado results in imprisonment for three to 12 months, a fine of $250 to $1,000, or both. If it is treated as a felony, the punishment is imprisonment for one to five years or a fine of $1,000 to $15,000, or both. A third offense of this nature in Colorado carries the punishment of imprisonment for one to 10 years, a fine of $2,000 to $30,000, or both.
Results of Cashing Several Bad Checks
If you consistently cash bad checks, your bank might report you to a consumer reporting agency such as ChexSystems, which tracks your deposit account history. This can make opening a new bank account in the future more difficult. But a more serious repercussion is that you may be reported to the authorities for criminal activity. Consistently writing bad checks can be evidence of criminal intent.
Cashing a Bad Check Unknowingly
If your bank tells you that you've cashed a bad check from a third party, contact the issuer of the check and ask them to resolve the matter by promising to pay you the full amount at once or by installments. If the issuer promises to pay the amount in full, wait a few days before contacting him again and asking if it's now safe to redeposit the check. If you cannot reach the issuer, inform the bank that you cashed a bad check from one of their customers. Ask if there are sufficient funds in the issuer's account to cover the amount of the check. If there are not sufficient funds, and you cannot get hold of the issuer, send a formal demand for payment or bad check notice to both the issuer and the bank via certified mail. If this doesn't result in payment of the funds you are owed, you can sue the issuer in small claims court, depending on the value of the check and the amount limits of your local court.