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BAD CHECKS REFER TO banking instruments (checks) that are not suitable for payment at the time they are presented to the issuer's bank. There is a presumption by the acceptors of checks that there are sufficient funds available to cover the checks. When the funds are not available to cover the check, the check “bounces.” It is declined for payment as the account has insufficient funds (NSF), or the account has been closed. In the computer age, bad checks also include counterfeit checks that are written on nonexistent accounts.

Bounced checks include those written against insufficient funds due to inaccurate accounting by the check writer, as well as those from check writers who knew the funds were not present but still wrote the checks. In most ...

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