What is a 'Rubber Check'

A rubber check is another name for a bounced check. "Rubber check" is a slang term used for a written check that does not have the funds available to be deemed good; it has a humorous connotation. A rubber check cannot be processed because the writer either (a) has insufficient funds in the account on 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 it.

BREAKING DOWN 'Rubber Check'

It is not a crime to inadvertently write a check that cannot be processed due to insufficient funds or a later stop-payment order. When a check bounces for insufficient funds, the writer of the check will face civil penalties. These include bank overdraft fees ranging from $20 to $40 per bounced check. Many banks offer overdraft protection, which allows customers to avoid overdraft fees, and also allows for the payment of rubber checks.

When a check bounces because of insufficient funds, the payee of the check may also impose additional fees or fines on the writer of the check. This is done to recoup any fines the payee incurs by trying to cash a rubber check. In some cases, if the writer of a rubber check realizes that the check is going to bounce before it cashes, or before it clears his or her bank, the check writer can mitigate these additional fees by notifying the payee of the check’s potential to bounce. The payor should then deposit funds to cover the rubber check into his or her bank account right away.

If a check bounces due to a cancellation or stop-payment order, the writer of the check may or may not incur civil penalties. Often, stop-payment orders or cancellation of checks is done when a check is lost or stolen, or written in error. In these cases, the writer of the check may simply issue another check as needed.

Rubber checks are catalogued in databases such as TeleCheck and ChexSystems. Individuals who write too many rubber checks may find that merchants start turning down their checks. Banks may also choose to close a checking account due to too many rubber checks.

Criminal Penalties for Rubber Checks

It is a crime to knowingly write rubber checks. While occasionally writing a rubber check probably won’t lead to criminal charges, habitually doing so can lead to felony check-fraud charges, especially if the rubber checks in question are sizable.

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