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Pitfalls of Checking Accounts 1. Keep your blank
checks safe. If someone steals your checks and forges your
signature, you are usually not liable, but if you were negligent in your care, you may not
be able to recover your funds. 2. Make
sure you have sufficient money deposited
into your account soon enough to cover all of the checks you write. Be aware that
some funds cannot be withdrawn for one or more days.
3. If possible, have a backup system in place such as an overdraft
protection line of credit to protect you in case you or someone else (e.g. payroll clerk)
makes an error.
4. Avoid
bouncing checks! A person who issues a check "knowing it will not be
paid... if he fails to make [it] good..." may be guilty of a felony. Returned
check fees can be very costly. Example: When a check for $10 was returned, both the
bank and the merchant charged a $20 bad check fee. The person ended up paying $50
for a $10 pizza. When payment is not made within 7 days of a written notice of
intent to file civil action, costs of collection including attorney fees may be added.
Such a pizza could end up costing $200.
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