Reasons For Bad Cheques
The reasons for receipt of bad cheques mostly has to do with the party issuing the cheque not having enough funds available in the withdrawal or checking-account. But apart from this reason there are many other more minor reasons that cheques may not be honored. They include:
- Account holder canceling the cheque i.e. deliberately dishonoring the payment.
- Account is closed. In such a case a fraudulent action might have been taken.
- No Authority to debit. The party owning said account might be under curatorship.
- Account under investigation. Issuing-party may have been involved in previous fraudulent action.
- Account holder deceased. Party issuing cheque might have passed-on before cheque is honored.
- Account frozen. Or effects frozen. Usually happens in divorce when estate is evaluated.
- Authorization cancelled. The issuing-bank took action.
- No such account. Party issuing cheque gave a false instrument or committed a fraudulent act.
Read more about this topic: Non-sufficient Funds
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