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Home >> Checks/Money Orders >> Checks You Received
NSF Fees and Charges Too?
Could someone from the banking industry explain the logic of how the receiving party of an NSF cheque, also gets a charge? I understand a bit, that someone who lobs bad cheques around are lessened if there is a fee; however, what is the fairness in hitting the poor guy/gal who got the cheque. It's a bit over the top and cruel, you can't possibly know everyone you deal with will never have a rough period.
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 Lets set the scenario first. John gets a check from Bob and deposits it into his account. Bob doesn't have enough money to pay this check, so it is refused and sent back NSF. Normally, the check would be sent a second time to see if it will then pay. Perhaps a deposit was slow in being made. If it comes back again, John's bank asks for the money back or automatically takes it out of John's account.
Now, John has lost that deposit plus he has to pay his bank a fee. The fee is for the bank's efforts in reversing that deposit, in having to notify John that the check bounced and potentially having to call and write to John trying to collect this money.
John, who now has the returned check, should try and recoup this cost by asking for cash to cover not only the check, but the fee he paid. The bank isn't charging John a fee because the check came back, but for the work involved in all the processing and collection efforts. Also be aware that there are many, many times that the check will come back, and not only will John not have the money in his account, but he is nowhere to be found. The bank then suffers the loss for that check.
Published on BankingQuestions.com 9/19/08
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