Bad Check Letter
Bad checks are less of a problem when your customer base is mostly commercial rather than consumer, but the potential is always there and you should be prepared to deal with bad checks when and if you receive them.
The Summary of State Bad Check Laws included in this Guide along with the Sample Bad Check Letter template in a Microsoft Word letter document for use on your computer will show you how to create and customize your company’s letter.
With Bad Checks, It Pays to Be Proactive
Bad checks are one headache your business can do without. Whether or not they are common in your industry, it always pays to be prepared to deal quickly and decisively with this unpleasant situation if it ever does occur. Bad checks are not only inconvenient, creating more paperwork for you, but they also cost your company money: returned item fees, expenses incurred while trying to collect the funds, and the amount of the check itself. And, of course, none of the above includes the cost you pay in aggravation. These are a few reasons why dealing with the issue head-on is always best. Taking a proactive approach will make it much more likely that you’ll collect the monies owed you.
Bad B2B Checks Do Happen, So Be Prepared
In a B2B sales situation, bad checks may not happen every day, but when they do, you’ll be much better off if you have a plan. That plan should include knowing your rights as a creditor and understanding the laws that govern bad check writing and collecting on bad checks in your state. This is where our comprehensive yet easy-to-follow tutorial can help. Because bad check laws vary from state to state, in addition to giving you the basic strategies you should use in preparing this letter, we also provide the crucial information you need to guide you in using your state’s laws to your company’s best advantage. Our Bad Check Letter tutorial includes everything you need to get results.
When Do You Need a Bad Check Collection Letter?
Your bad check timeline might look something like this:
- You deposit your customer’s check into your company’s account.
- A few days later that check comes back from the bank marked “NSF.”
- Your bank likely charges you a returned-check fee.
Whether you need this letter will depend on how you decide to handle the issue from this point on. If you opt to try collecting the money yourself — before turning the matter over to a collection agency or to your city or county prosecutor — this letter can be the greatest weapon in your arsenal for convincing your customer that covering the amount of the check, as well as any additional fees allowed in your state, would be the smartest move they could make to protect their business’s credit rating and to avoid running afoul of the law.
How Our Bad Check Letter Template & Guide Can Help
Our guide will give you the key strategies you need for preparing and using this letter as an effective part of your overall plan for collecting the monies that are due. In our tutorial, we also tell you what not to do in order to avoid further difficulties collecting the balance due and to help you retain your ability to use your state’s bad check statutes as your ally in the collection process.
How to Avoid Bad Checks
Nearly 90% of bad checks are drawn on accounts less than one year old. Be suspicious of checks that have a number less than 125 or no number printed on it at all. Check the date and don’t deposit a check that is postdated – it may be defensible under Bad Check Statutes. Never ask for a post-dated check in response to a customer who “won’t have the check for two weeks.” In many states the criminal provisions regarding bad checks do not apply to post-dated checks. Post-dated checks are a promise to pay in the future, so they are not technically viewed as checks within the scope of most states’ bad check laws.
When You Receive a Bad Check
The first thing, of course, is to call the customer and let them know the check bounced and ask if you should ask your bank to re-deposit the check. If you can’t reach the customer or if the check bounces again, your choices are:
- Try collecting the monies yourself
- Ask your collection agency to help
- Turn it over to your city or county’s bad check program for prosecution
Keep the following in mind if you decide to collect the money yourself prior to calling in your outside collector or submitting to your city or county for prosecution:
- When mailing a bad check collection letter, make sure to put “Address Service Requested” underneath your return address. This is a valuable skip-tracing tool.
- If the customer offers to make good, accept only cash, money orders or cashier’s checks.
- Do not return the bad check to the check writer until you have received payment in full.
Download Our Free Bad Check Collection Letter Guide
When you download our guide, you’ll receive the following four valuable tools:
- Information and guidance for creating your letter
- Bad Check Collection Letter sample demonstrating the process
- Legal summary and charts listing each state’s bad check laws
- Fully editable Bad Check Letter template in MS-Word
It always pays to be “in the know” whenever you’re dealing with any legal process, and this one is no different. So, be sure you have this valuable Bad Check Letter guide nearby before you begin writing your letter. It may just help you collect without having to involve a debt collection attorney or criminal prosecutor at all.
Browse Our Other Four Collection Letter Guides
The above guide is just one in our set of five free Collection Letter tutorials. Each tutorial focuses on a different commercial debt collection issue and helps you create an effective letter to resolve it. Check them out today, and be ready when you need them.
At Stevens & Ricci, for two decades we’ve been helping businesses like yours Collect Money Sooner, at Lower Cost, and Without Losing Valued Customers. Our free collection letter guides can help your company do the same.