What Is the Definition of a Dishonored Check?


Quick Answer

A dishonored check is defined as a check that has been presented to a banking institution for payment and has been returned to the depositor due to insufficient funds. Dishonored checks are also referred to as bounced checks or returned checks.

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What Is the Definition of a Dishonored Check?
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Full Answer

Dishonored checks occur for a variety of reasons. In many cases, an individual simply miscalculates his checking account balance and unknowingly writes a check for an amount that exceeds the balance. Alternatively, there are also cases in which an individual intentionally attempts to cash a bad check in order to receive cash that is not rightfully his. Many banks provide customers with what is known as a "shadow balance," a secret line of credit that is determined by the bank that allows for payment of over-drafted checks at the bank's discretion.

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