Contractor's insufficient funds fees

[nkahlilj]

I recently paid a contractor working on my house by personal check. The check I wrote was returned for "insufficient funds". I notified the contractor and offered to write him a new check and offered to pay the additional charges his bank would impose because of my returned check.

I was shocked when he said the bank had charged him $270 for my returned check!!! I've asked for documentation, because I believe he probably wrote checks of his own (in anticipation of my personal check) and when mine was returned, so did his!

Are there any laws that limit my liability for fees imposed by his bank? By the way, I live in New York City.

Thanks for any advice!

[disneysteve]

Bank fees are ridiculous but not that ridiculous. I'm sure they don't charge $270 for a bounced check. It is probably more like $25 or so. He should be able to provide proof of the actual charge. I wouldn't reimburse him anything without clear proof from his bank.

I also wouldn't expect him to accept another check from you. You should be prepared to settle your bill in cash.

[snafu]

I agree you need evidence to support his $270. claim BUT he had every right to presume your check was good and therefore write checks from his a/c. He will lose his credit worthiness, have to explain to his creditors, hope they will accept new checks from him and expend his time and effort. If you caused me that much effort, I'd expect you to pay my out-of-pocket costs.

[disneysteve]

he had every right to presume your check was good and therefore write checks from his a/c.

When I deposit a check into my account, I don't immediately try to spend that money. I wait until the check has cleared.

This guy didn't wait. He tried to spend the money before the check cleared. That's his fault, not OP's.

[highsavings]

I have only heard of being responsible for paying a single bounced check fee. Any fee caused beyond your check bouncing is the contractors fault.

[nkahlilj]

Thank you all for your comments. I have asked him for records and have not received them yet. Are any of you aware of any sources I can research on returned check policy?

Thanks

[minnie1928]

If you know what bank he deposited the check at, then you should be able to contact that bank and ask them how much they charge for a returned check.

[disneysteve]

If you know what bank he deposited the check at, then you should be able to contact that bank and ask them how much they charge for a returned check.

Exactly what I was going to suggest. It shouldn't be hard at all to find out what his bank charges for returned checks. You just need to know which bank it is.

[DayByDay]

There is the fee for your check bouncing, his bank's fees for each check he wrote from his own account that bounced, and the fees from the other banks of those people who cashed his bad checks and who want to be reimbursed by him. The ripple effect that started from your bad check could easily add up to $270.

[disneysteve]

There is the fee for your check bouncing, his bank's fees for each check he wrote from his own account that bounced, and the fees from the other banks of those people who cashed his bad checks and who want to be reimbursed by him. The ripple effect that started from your bad check could easily add up to $270.

The only fee that would be the responsibility of the OP, though, is the fee for his/her check bouncing.

[LuxLiving]

Thank you all for your comments. I have asked him for records and have not received them yet. Are any of you aware of any sources I can research on returned check policy?

Thanks

Do you have a State banking commission you could contact? Or your local District Attorney's office? They likely could tell you something on state laws!

[DayByDay]

The only fee that would be the responsibility of the OP, though, is the fee for his/her check bouncing.

Maybe so, legally. Morally, I think the OP owes the money. It was the OP's bad check that started the problem.

[disneysteve]

Maybe so, legally. Morally, I think the OP owes the money. It was the OP's bad check that started the problem.

I'd have to disagree. As I said above, when I deposit a check in my account, I don't spend that money until the check has cleared. That's very basic personal finance knowledge. That money isn't actually in my account until the check clears and I don't spend money I don't have. It was the contractor's responsibility to monitor his own account and not write checks that he didn't have funds to cover.

[DayByDay]

I'd have to disagree. As I said above, when I deposit a check in my account, I don't spend that money until the check has cleared. That's very basic personal finance knowledge. That money isn't actually in my account until the check clears and I don't spend money I don't have. It was the contractor's responsibility to monitor his own account and not write checks that he didn't have funds to cover.

I'm sure the contractor wrote the checks while the money showed in his account. It could be two weeks before the bank takes the money back (that happened to me). The OP should have made sure it was a good check. The contractor trusted her to do so. (How many bad checks must one write before it is considered criminal?) So I'll stick to my opinion that, morally, the OP should pay for all of the contractor's fees.

[Caoineag]

I have had checks clear in my account before turning out to be no good two weeks later. I can assure you I was not happy with the source of the bad check. I am with DaybyDay, morally, the OP should pay all the fees. In fact, most businesses will pay all the fees associated with their bad check (research company that overdrafted my account and my firm's payroll didn't deposit in time though the payroll episode didn't effect me).