Encashing A Bounced Check...

[guardian]

I experienced this peculiar situation on Friday. I had deposited a cheque for collection on Thursday morning in my account (with a major Thai bank). Since the cheque and my account are different banks, there's the obvious 1 day clearing time. Then, on Friday, 3pm, my staff went to the bank and withdrew an amount more than the cheque value only after the bank confirmed that the cheque has been passed (crediting time 2pm). Then, around 3.45pm, bank calls and says that the cheque bounced due to lack of funds and demanded the money back. Having never experienced such a situation before, I consulted with a few other persons and majority of them said that now it was the bank's problem and that I had no legal obligations to return the money. A few others asked me to consult a lawyer. Again, differing opinions from different lawyers. Some asking to return while others said bank's problem.

To further compound this problem, I don't even know the issuer of the cheque. It was endorsed by another client who is out of the country till Tuesday. And I cannot contact him. So, after thinking over for some times, I decided to return the money to avoid any further legal consequences.

Did I do the right thing or should I have remained adamant that the bank could not possibly have made such a major error.

Has anyone ever experienced such a situation before?

PS: One person even suggested that the cheque could have been issued by a very influential person who might have issued multiple cheques on that particular day and I was not on his list of preferential receiver but got credited by luck and so they might have pressured the bank to bounce that particular cheque and pay their preferred recipients.

[mouse]

Yes, I have and to avoid the further complications with my bank and bad rep as a result I returned the funds to the account. However, when I confronted the person that issued the check (allowing for a lot of face savings for him) I requested and received an adequate additional amount to cover my expenses in the whole matter, which included legal consultation fees etc. Next time he will think before doing so, whether by accident or design. From now on we only accept PayPal, Visa, MasterCard, Cash or ATM transfer, unless they are steady repeat clients.

[lingling]

I think you better pay the bank back, but you can have the check issuer arrested. Writing a bad check is a criminal offense in TH.

[topfield]

I experienced this peculiar situation on Friday. I had deposited a cheque for collection on Thursday morning in my account (with a major Thai bank). Since the cheque and my account are different banks, there's the obvious 1 day clearing time. Then, on Friday, 3pm, my staff went to the bank and withdrew an amount more than the cheque value only after the bank confirmed that the cheque has been passed (crediting time 2pm). Then, around 3.45pm, bank calls and says that the cheque bounced due to lack of funds and demanded the money back. Having never experienced such a situation before, I consulted with a few other persons and majority of them said that now it was the bank's problem and that I had no legal obligations to return the money. A few others asked me to consult a lawyer. Again, differing opinions from different lawyers. Some asking to return while others said bank's problem.

To further compound this problem, I don't even know the issuer of the cheque. It was endorsed by another client who is out of the country till Tuesday. And I cannot contact him. So, after thinking over for some times, I decided to return the money to avoid any further legal consequences.

Did I do the right thing or should I have remained adamant that the bank could not possibly have made such a major error.

Has anyone ever experienced such a situation before?

PS: One person even suggested that the cheque could have been issued by a very influential person who might have issued multiple cheques on that particular day and I was not on his list of preferential receiver but got credited by luck and so they might have pressured the bank to bounce that particular cheque and pay their preferred recipients.

This is exactly why the cheque law was changed in the UK some ten years ago ! Cheques stolen/altered then endorsed over to some unsuspecting third party. In UK cheques are now issued a/c payee. It's time Thailand caught up with the harsh facts of modern banking and made all cheques non endorsable to prevent such fraud.

[guardian]

This is exactly why the cheque law was changed in the UK some ten years ago ! Cheques stolen/altered then endorsed over to some unsuspecting third party. In UK cheques are now issued a/c payee. It's time Thailand caught up with the harsh facts of modern banking and made all cheques non endorsable to prevent such fraud.

Sorry, did not update this thread. Actually, there was no intentional alterations etc. There was a genuine mistake on the part of the issuer of the cheque. He thought that the cheque was issued for end of December while in fact it was for end of November. Have cleared up the matter with the person who endorsed the cheque to me.

But, what I still find amazing is how the ĥēļļ did the bank pass the cheque in the first place and then claim that there was insufficient funds ?

[PeaceBlondie]

In the way you tell the story, your bank 'honored' the check within about 30 hours. That's not enough time, given the system, to know the check was genuine. I imagine that your bank's 'approval' was tentative, pending final clearance.

You don't know the issuer of the check, and it became 3rd party or 4th party. No bank in the First world is going to automatically say, "Oh sure, Jones to Thomas to Xkriokl, those look like their original handwritings, and we know them."

I don't mean to be harsh, but my bank doesn't even honor a check with a signature on my own account, on the front, at the teller's window if it doesn't resemble my signature.