Rubber Check

DEFINITION of 'Rubber Check'

Another name for a "bounced check." A rubber check is a slang term used for a written check that does not have the funds available to be deemed good. A rubber check cannot be processed because the writer either (a) has insufficient funds in the account, which the check is drawn, or (b) has placed a stop payment or cancellation on the check, making it impossible for the check holder to cash the check.

BREAKING DOWN 'Rubber Check'

In either case (insufficient funds or stop payment) the check writer knowingly issues the check with the intent to not make good on the payment. While the practice is not illegal, it is a sign of poor business character in most cases. Additionally, most rubber (or bounced) checks are subject to high bank penalty fees, typically ranging from $20 to $40 per bounced check.

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