Learn How to Verify a Check Before Depositing

Image shows the front and back of a check. Text reads:

Image by Colleen Tighe © The Balance 2019

Checks are often used for large payments, but you can’t tell if a check is good by looking at it. Unless the check writer has sufficient funds available when your check is presented to the bank, the check will bounce. If that happens, you’ll pay fees to your bank, and you have a worthless piece of paper. To get the money you’re owed, it will take additional time and money.

What to Watch For

Fortunately, it’s possible to check out a check before you accept it or try to deposit the check at your bank – and it’s wise to do so with any checks you have doubts about. You’ll never know for certain if the check is good, but you can get some good information (and possibly even a guarantee) to help you decide what to do with that check.

There are several items to check on:

  1. Does the checking account have funds available?
  2. Is the check a legitimate document or a fake?
  3. Does this person make a habit of bouncing checks?

How to Verify Funds

If you’re holding on to a check that’s suspect, a good first step is to try to verify funds in the account. To do so, contact the bank that the check is drawn on and ask to verify funds. Some banks, in the interest of privacy, will not provide that information – so you won’t know any more than you did before you called.

Others will tell you if there is currently enough money in the account to cover the check. Of course, that information is only a “snapshot” of what’s available in the account at the moment you check. The account holder could withdraw funds, or other charges could hit the account after you hang up. If you’re able to verify funds and you know that the check is good, deposit the check immediately.

If you can’t verify funds (or if you want to be especially cautious), take the check to a branch of the bank that the funds are drawn on. You might be able to cash the check there instantly – which eliminates the chance of the check bouncing. Not sure what bank to call or visit? Learn where to find that information on a check.

How to Spot a Genuine Document

Even if the account has funds available, it’s possible that you’ve been paid with a fake check. With today’s technology, it’s easy to copy a real check and print a genuine-looking (but fake) check. The result: When you try to deposit the check, it will eventually be returned due to fraud.

Inspect every check you receive to make sure it’s good. If you have any doubts, don’t accept the payment. Most checks have multiple security features, which are described on the back of the check. Look for:

Verifying security features on a check isn’t foolproof.

Sophisticated con artists can always buy genuine check stock (the security paper that checks are printed on) and use somebody else’s account number.

And amateur-looking checks aren’t necessarily going to bounce: Some legitimate check writers print their own checks at home. However, anything that looks funny is good information, and it can help you evaluate the situation.

A Database of Bad Checks

If you run a business, you might accept checks and regularly have to wonder if those checks are any good. Verifying funds can be time-consuming, and it might not be possible to do so while customers are waiting in line.

The best way to protect yourself when bad checks are common (or just too expensive) is to use a check verification service. Those services help you identify bad checks by checking several databases before you accept the check as payment (you run the check through a check reader or punch in the routing and account number online).

Check verification services have lists of people who routinely bounce checks, and they can also (sometimes) tell if an account has been closed. For an extra fee, some services even guarantee the payment: If the check bounces they’ll pay you so you don’t have to eat the loss. If that’s more than you need, a good set of rules can help you and your staff avoid taking bad checks.

Just in Case

It’s impossible to only accept good checks. Even good customers make mistakes and fail to keep funds available – even though they intend to pay you (and, ideally, they eventually will). Be prepared by getting contact information from everybody who pays by check. Verify that you have a current phone number and address, and check identification to be sure that everything matches.

Check local laws to find out what recourse you have when checks bounce. If you run a business, it may be worth posting a notice that informs customers of actions you intend to take when checks are returned.