Check writing 101

I recently found myself attending a class for first-time offenders in the Polk County Check Restitution Program – which, of course, is the class you can take instead of going to jail for writing a bad check. If you pay the fine, and take the class, you don’t get prosecuted. Now of course I felt that in my case there were all kinds of extenuating circumstances, but the bottom line was that the check bounced and I didn’t pay it back in a timely manner.

So I was forced to spend a recent Saturday in a class with a bunch of other people who all had lots of extenuating circumstances. And, surprisingly, I learned a few things. The most important of which was that while a checking account is the primary way that we as consumers do business in America, it is still merely a convenience and is actually frought with peril. Here are some examples of how your checks can get you into trouble even if you DO have plenty of money in your account:

First, the ONLY legal proof you have that you made a deposit is that little slip of paper that the teller hands you at the end of your transaction. Your bank statement is not legal proof; nor is the “receipt” you get from your employer showing your direct deposit transaction. The ONLY legal proof you have of making a deposit is that slip you get from the teller. So – DON’T go feeding those to the paper shredder like I’ve been doing, and if you have direct-deposit, contact your bank about issuing you a receipt by mail for every deposit – or quit using the direct deposit.

Second, you know that blank line on your printed check where you sign your name? Next time you have your checkbook out, look closely at that line and you’ll probably see that it’s not a solid line at all – it’s actually a line made up of teeny-tiny lettering which states, “authorized signature.” What this means is that ANY signature on your check is being represented BY YOU (the account holder) as being your “authorized signature.” If someone steals your checkbook and signs your name in their writing, that’s your authorized signature. If they sign their name, that’s ALSO your authorized signature – until you contest those checks, you’re responsible for the face amount of every check, the insufficient funds fees charged by your bank, the bounced-check fees charged by merchants, etc. until the problems are resolved.

Third, it should go without saying that balancing your checkbook “never” or “occasionally” is not good enough to stay out of trouble. Psychic banking is a dangerous practice, albeit one that I have been using for a long time. It’s quite possible that by opening your bank statement you’ll find one of those “bank errors in your favor” – more than one person in this class reported that they discovered their bank had mistakenly debited the wrong amount from their account for certain checks, and that they were owed money by the bank. And our instructor reported that he found a cancelled check in his statement that he had written to his son for $10, but had been debited from his account as $100 because the son had clearly altered the amount of the check. And no, the son did NOT try to alter the part that said “ten and no dollars,” he just altered the numerical amount – and the teller who cashed the check didn’t even LOOK to make sure the amounts matched. The bank’s fault? Nope – the instructor’s fault unless he could prove that the check had been altered.

I left the class wondering why a person should have a checking account at all, and it seems to me the only reason to have one would be to pay the bills you have to mail, since putting cash in the mail is still a worse idea than writing a check. So I’m going to try to move in the direction of paying more cash and writing fewer checks… which will maybe make the process of balancing the checkbook less daunting. Who knows, maybe losing that sunny, beautiful Saturday to a bunch of deadbeats will actually have been a GOOD thing.

Editor’s note: this post originally appeared on my first blog, “A Blogger Looks at Forty,” in May 2003. I’m now on the other side of 50 and am writing far fewer paper checks, although that’s only because I’m now addicted to my debit card.

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