A customer wrote a check to my business three months ago. I just received notice that the check was returned due to NSF and my bank debited my account for the check. This debit caused a substantial overdraft to the account. Why am I liable for this mistake? What can I do to recover the funds, and is there any way I can get the overdraft fees taken care of as well?
Whether you are liable or not will depend largely on what happened to the check from the time you deposited it to the time it bounced back to your account. The bank the check was drawn on had 24 hours to dishonor the check for insufficient funds, starting with the date the check reached them for payment. If the check was delayed on that trip to the drawee bank, perhaps by being misrouted or lost, the paying bank can't be held liable. Similarly, if the check was sent correctly on its way back by the drawee bank and somehow was delayed, there's no one at fault.
If either bank caused the delay, however, you may have some recourse. If there was no one else at fault, your only way to recover the funds is to go after the customer who wrote you the check.
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Whether you are liable or not will depend largely on what happened to the check from the time you deposited it to the time it bounced back to your account. The bank the check was drawn on had 24 hours to dishonor the check for insufficient funds, starting with the date the check reached them for payment. If the check was delayed on that trip to the drawee bank, perhaps by being misrouted or lost, the paying bank can't be held liable. Similarly, if the check was sent correctly on its way back by the drawee bank and somehow was delayed, there's no one at fault.