A “Non-Sufficient Funds” fee is charged when a bank account doesn’t have enough money to cover a check that’s being cashed. The issuer and recipient of the check can both be charged, and the recipient will have the check returned or “bounced” back to them.
How Do NSF Fees Work?
NSF fees are usually around $30-40. When a check you’ve written bounces, you get charged this fee. This means you owe money to the bank, but you also owe the amount on the check you’ve written to an individual or a company. However, the recipient may also have to pay a sum because the check was returned, and in some cases, even an overdraft fee may be charged.
A bounced check can be inconvenient to all parties included. When trying to mend the consequences, it’s essential that everybody stays informed of the current situation and in contact with each other.
What if the Check You Wrote Bounces?
First, and most importantly, contact the company or person who you issued the check to; inform them that you are aware of what happened and that you are working on fixing the problem.
If they know you’re willing to cooperate and will still provide the money, you gain some time to sort things out. There are options to consider when it comes to the method of paying back the money, and it’s best to discuss them with the other party to ensure it’s appropriate and benefits everyone.
1) Put enough money in the bank account that was originally supposed to cover for the check.
After you’ve made sure that the amount is sufficient, ask the recipient to re-deposit the check. Note that this can only be attempted once with the same check.
2) Ask the recipient if you can pay them back via installments, rather than a check.
This may be more appropriate when dealing with companies; most of them will accept the offer and give you a deadline. If you choose this option, ensure you aren’t late with your monthly payments. A company may seek legal action otherwise.
3) Cover for the NSF fee as soon as possible.
Although it’s not a large amount, the bank may report you to a collection agency if you delay settling the debt.
What to Do if the Check You Received Bounces?
Contacting the issuer immediately is a good start. If you’ve received a check from a company, you can expect them to issue a new one. If you were given a check by an individual, they would probably ask you to try re-depositing after settling any problems with their account.
If neither of the two options above worked, you should consider the following:
1) Send a demand letter via certified mail.
It should include a request to be paid the amount initially written on the check, the returned check fees, the price of certified mail, and a receipt, all to be covered within a set deadline (usually 30 days or so, depending on the state you’re in). The demand letter should be sent to the issuer as well as their bank.
2) Take the case to small claims court.
In case the demand letter doesn’t help, the issuer doesn’t reply, or misses the payment deadline set in the letter, you can take this action. Of course, you should view this as a last resort.
How to Avoid NSF Fees
The most obvious advice is to keep track of your balance! With online and mobile banking options, and many applications available to help you keep track of your checkbook, it should be fairly easy to navigate. You just need to consider your situation carefully before making a decision.
Lastly, you should consider overdraft protection for your account. You will be charged a bit extra, but it will cost you less than overdrafting would. All banks offer this sort of service, and with it, peace of mind knowing that you are safe even if you unintentionally overspend a bit.