Quote:
Originally Posted by Flash
It has nothing to do with credit rating...it's all about the kind of account he has. If his account is new, then banks will hold all deposits through the ATM to make sure they clear, even cash since the ATM cannot distinguish between a cheque and cash. Most banks will cash a payroll cheque at the teller, which would give your friend incentive to get to the bank instead of using the ATM. Better yet, if he were to have his cheques directly deposited to his bank account.
If he's short like that, he could always go to a pay day loan place...I used to work for one, and they have you write a cheque out to yourself and leave it with them to be withdrawn on payday...but with that said, if he's depositing his cheques through the ATM and it's taking 6 business days to clear, the chances of the cheque to the payday loan place bouncing are pretty good.
And to answer the question...writing a cheque when you know you don't have the funds to cover the face value of the cheque is considered fraud.
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I am an accountant (CMA) and my father worked for the Bank fo Nova Scotia for, well, forever...Flash is correct in everything he just said, including the last, most important point.
If you write a cheque to yourself when you know that you don't have the funds, you have commited fraud. Depending on the amount you are defrauding and the frequency of fraudulent activity, your bank could potentially bring charges against you. Even if the result is a slap on the wrist, you will have a lot of trouble with credit through banking institutions in the future.
The bottom line, don't do it. You'd be better to pay the service charge at the payday loan place than risk it (even though I'd only go to the payday loan place if I food or shelter were a concern).