Check without Background: What is it and how to solve this problem?

Receiving and paying for goods and services with checks is still a common practice in Brazil. However, several problems can arise, especially when receiving payment. The biggest one is undoubtedly the bounced check.

Therefore, we will show you everything you need to know about this type of check and what to do if you receive one.

Follow our article to the end to learn more about bounced checks.

What is a bad check?

A bounced check is a check that cannot be cashed by the payee because the check writer does not have sufficient funds in his or her bank account to cover the amount of the check.

In other words, when the check is presented for payment at the bank, the account of the person who issued the check does not have the money available to transfer to the payee of the check.

When this happens, the check is returned to the beneficiary as "no funds." The issuer may be held liable for issuing a bad check and may face fines or penalties. Furthermore, the situation can harm the issuer's relationship with the beneficiary and the bank where the beneficiary holds an account.

What happens to someone who issues a bad check?

When someone writes a bad check, they can face several consequences, such as:

• Fines and Penalties: The writer of a bad check may have to pay fines and penalties for issuing a bad check, as well as interest on the check amount.
• Bank restrictions: The issuing bank may restrict your bank account, limiting access to banking services or even closing the account.
• Bad credit rating: The issuer of a bad check may have their name included in defaulter registries, such as SPC and Serasa, which may make it difficult to obtain credit in the future.
• Legal action: The beneficiary of a bounced check may file a lawsuit against the issuer, demanding payment of the check amount plus interest and penalties.

Therefore, it's important for the issuer to have sufficient funds in their bank account before issuing a check. If there's any doubt about the availability of funds, it's best to opt for other payment methods, such as wire transfer or bank slip.

What should I do if I receive a bounced check?

If you receive a bounced check, there are steps you should take to recover the check. Here are some steps you can take:

• Contact the bank and collect the check that bounced.
• Contact the check issuer and inform them of the situation. It's possible that an error or temporary issue prevented funds from being deposited in your bank account. Explain the situation and try to resolve the issue amicably.
• Present the check again: If the issue cannot be resolved directly with the issuer, or if the issuer has already deposited the funds into the account, present the check again for payment. The bank will double-check whether there are sufficient funds in the account, and if so, the check will clear. If there are still insufficient funds, the check will be returned as bounced.
• Notify the Issuer: If the check is returned as bad again, notify the issuer of the check in writing, informing them that they have a deadline to rectify the situation.
• Seek legal advice: If the issuer fails to rectify the situation within the established timeframe, you can seek legal advice and file a lawsuit to recover the check amount.

Remember that it is important to keep the returned check as bad and proof of deposit attempts to present as evidence in the event of a potential lawsuit.

Can I resubmit a bad check?

If you've received a bounced check, you can make a second deposit attempt. This is a procedure you should follow if you can't resolve the issue directly with the person who issued your check.

After the second attempt, if it still counts as "no funds," you can go to court to collect the check. You have up to six months to do so.

What happens to those who issue a bad check?

If the check is issued on demand and has no funds, it may be considered fraud and the person who issued it may be held liable for a crime.

But it can happen that the funds aren't received, especially with post-dated checks. If the issuer resolves the issue after the first check is presented, nothing will happen.

If the check is presented twice and returns as “no funds,” the bank sends the person’s name to the Registry of Issuers of Bad Checks (CCF).

This registry was created by the Central Bank and can be consulted by any credit institution.

If the person's name is on the registry, it is more difficult to obtain financing, new accounts, new cards, and it also directly affects the score.

It is possible to check if your name is on the CCF accessing the federal government website here.

If so, regularize the payment so that it is reported to the system and, then, within 10 days, your name will be added to the registry.

Does a bad check debt expire?

Many people wonder if a bad check expires, that is, if it stops being collected.

This can happen as long as five years have passed since the debt was outstanding. However, during this period, the person who received the bad check can take legal action against the issuer, resulting in significant consequences and demanding payment in court.

But be careful. If you received a bounced check, you have 30 days to present it to the bank. If it bounces, you have six months to file a lawsuit.

If in doubt, we recommend that you consult a lawyer you trust.