How to Verify a Personal Check

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Checks Cashed!Have you ever been given a check that just doesn’t sit right with you? Isn’t it unfair that your bank will charge you an exhorbitant fee when you deposit someone else’s bad check? However, sometimes you still need to take the risk by accepting as many forms of payment as possible, especially if you’re a business, and there are things you can do to protect yourself. These aren’t perfect solutions, in fact they are far from perfect, but by taking these steps you can reduce your risk significantly.

First things first, you need to trust the person giving you the check. If you don’t, ask for an alternate form of payment. A money order from the USPS costs only $1.10 to $1.50 (max of $1,000) and can be cashed at a bank or a Post Office. For larger payment amounts, have the buyer get a cashier’s or bank check. There’s a small fee but it should be nominal compared to the amount of the payment and just part of doing business.

If, however, you have no choice but to accept a personal check, there are a few things you can do to verify that the check is a good one. This comes in two steps – verifying the check itself is good and then verifying the associated account has the necessary funds.

Verifying the Check

Here’s what I would do to verify a check:

  • Ask for alternate forms of identification, like a driver’s license, preferably government ID with a signature on it. Compare that signature and name to the one on the check. Make sure everything matches.
  • Don’t accept a check unless it has the name and the address of the person printed on the document. Hand written names and addresses are no good. The bank will be unlikely to confirm personal details on an account so at a minimum you need that information printed on the check.
  • Run a reverse lookup on the ABA number, the nine digit number at the bottom of the check, and confirm it matches the personal check.
  • Look up the phone number of the bank by going to their website. Don’t trust the number on the check, it can easily be faked. If you call a fake number on a fake check, you could get a fake banker willing to verify fake funds. 🙂
  • When you call, or visit the bank, have them take a look at the check to see if it’s legitimate. If they think it’s legitimate, it’s time to verify funds.

Verifying the Funds

Here’s where it gets a little tricky because banks won’t provide personal details and will likely make it difficult for you to verify funds. Your best option is to visit the bank and ask a teller if they can verify that funds exist to cover the check. They may require that you pay a fee, you will almost always be required to visit the branch, but if you are really concerned, it’s better to pay a smaller fee up front than a bounced check fee later.

What if the check draws from a bank unwilling to verify funds? Go with your gut. If you have a funny feeling, demand payment in another form. Pay the few dollars for the secured version of payment by deducting it from the check amount. The fee for a bank check or money order will look downright microscopic next to a bad check fee.

In the end, it’s best not to deal with this problem at all by requiring secured forms of payment. However, if you have no choice, taking these steps will give you the best shot at not getting slammed with a bad check fee.

(Photo: livenature)

{ 17 comments, please add your thoughts now! }

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17 Responses to “How to Verify a Personal Check”

  1. Shaun says:

    When I am in this situation, I just go to a branch of the bank the check is drawn on and cash it there. No need to ask to verify funds. I assume if the account doesn’t have funds, they won’t cash it. Best of all, if they do cash it and it turns out the account doesn’t have funds to cover it, you are safe. They have no account of yours to withdraw the money from or charge a NSF charge against. Never had to pay a fee to do this either.

    • jsbrendog says:

      this is definitely a good idea but there aren’t branches of every bank everywhere and sometimes this just isn’t plausible. Plus it takes an extra expenditure of time and energy

      • Glenn Lasher says:

        An acquaintance of mine introduced me to an interesting practice to handle this issue.

        Although I usually get paid cash or barter for my side-line work, if someone wants to pay me by cheque, I will add a $10 surcharge for the privilege. This covers my time to go to their bank, plus the fee that their bank will charge me for doing so (often $5). If they use an e-bank or a non-local bank, then I do not accept the cheque unless it is someone I fully trust.

    • Cosmo says:

      In my experiences in Minneapolis, a lot of banks won’t do this anymore unless you have an account with them. Otherwise they ask for your credit-card info to secure themselves.

  2. ziglet19 says:

    Great point about looking up the phone number of the bank by going to their website. I don’t think that would have ever occurred to me.

  3. I used to do what shaun mentions when I had a retail business and folks would send checks to purchase something they had seen while on vacation. These days I have a different type of business and only accept credit cards. The reason for this is that when I did accept checks, it was too much of a hassle if I couldn’t collect. I am more than willing to pay the cc fees because it makes up for the hassle of not getting paid.

  4. eric says:

    This is why checks are so outdated and inefficient. The security just isn’t there.

  5. Shirley says:

    Larger grocery stores (and I imagine this is available to many others) have a list of phone numbers for banks that reach an automated funds verification process. We would dial the number, key in the account number and the amount. It would tell you if the amount exceeded the funds available.

    Agreed that this is not available for every bank, but probably ought to be, even if not automated.

  6. mikestreb says:

    Here is what I do that works no problem and can be done quite quickly over the phone. I thought this was standard at all banks (I have never had someone tell me no). I do this a couple times a day at my small business and have them wait while I go in the back office to call.

    Google the name of the branch and find the closest one to you and call them… Tell them you would like to verify funds availability for a mutual customer. Then you tell them the account number from the bottom of the check and the amount (sometimes they ask for the person’s name too). From there, all they can tell you is yes there are funds available to cover the check or no the funds aren’t available.

    Anyone else do this with success? or have I just been getting lucky doing this?

    • cdiver says:

      This has worked for me several times before.

    • Daniel says:

      I know my landlord does this with personal checks. Generally he requires a money order for rent. I find this incontinent and have made arrangements for him to accept checks via bill pay as they are bank issued

  7. Dbax says:

    I am a police detective in Phoenix. Never, EVER, accept a cashiers check from a stranger! Biggest scam going. They can be printed on computers and look real. Banks cannot even tell until it’s to late.

    • Strebkr says:

      I agree, my brother sold some stuff on Craigslist and got all sorts of scammers sending bogus checks to cash. They really did look real.

  8. Mcneri says:

    I agree with @Dbax. Checks are so easy to fake that as a small business, it will be more prudent to cut off the 80% of hassle that brings you only 20% of business, if at all it does so. (Pareto Principle). Deal with cards, pay the fees and have your time to market to those that will pay you better.

  9. tim says:

    Most banks are beginning to refuse to verify funds over the telephone. Some are even trying to charge a fee for verifying funds in person at a branch of the bank that the check is drawn on, or if you attempt to cash it they may also try and charge a fee for cashing the check even though its drawn on their bank (it’s legal I checked with the OCC), anybody else pulled this crap it would be called extortion and racketeering.

    I will take the checks to the bank they are drawn on to cash them. If any of these banks attempt to charge me a fee for cashing their own checks or for verifying funds (at a minimum), I will refuse to accept check drawn on that bank from anyone or any business in the future.

    Cash works – these greedy bastards can take a hike.

  10. Alexis says:

    Sometimes it is better to take payments thru paypal, escrow or some other financial institutions rather than risk ending up with a bad check. I only accept paypal payments myself. I have been burned by people using personal checks and aftet the last one a few years ago I learned my lesson.

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