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How to Verify a Personal Check

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:

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 [4])