Contractor's insufficient funds fees

[wincrasher]

Business accounts can carry much higher fees than personal accounts, so be prepared for that. Could be just a few bounced checks.

I'd say I would pay his request. If he's still working on your job, then you want a happy contractor - stiffing him for the $270 could cost you much more somewhere else - or stop your job while you are in a dispute. Also, he can place a lien on your property if he's not paid. Courts generally are sympathetic to mechanic's leins and are hard to dispute once they are filed.

Also, if he trusted you (that your check was good) and wrote other checks to suppliers on your job to keep it on track, then I think you are ethically bound to make him whole on those.

Never write a check that is not cashable on the spot. In my state, a contractor can have a warrant issued for your arrest for writing a bad check - regardless of the amount. I've known people who've had a warrant issued on them for a $25 check at the grocery store. You end up having to appear before a judge and end up paying court costs as well.

[disneysteve]

I'm honestly surprised by the answers here. Does anyone know what the legal requirements are? If I write a check that bounces, can I actually be held liable for every check that bounces down the line as a result? Theoretically, that could be a chain of dozens of customers and thousands of dollars in fees.

Until this thread, I have never heard anyone suggest that I would be responsible for anything other than my own check. I have a cousin who is a bank officer. I'll have to ask him when I speak to him this week.

[Caoineag]

Legally in Colorado, if they take you to court over a bad check, they are entitled to treble the face value of the check plus reasonable fees. Generally, people aren't that mean until your second check bounces, especially since it requires the person to knowingly write a bad check. I have worked a case or two where people got sued for bad checks...

[cicy33]

I can see both sides here. I can understand that when you agree to pay bounce check fees and are assuming it will only be a small amount, and then to have the sticker shock when it is almost 300. However, when contractors accept checks generally their banks clear the funds immediately so for him there was no waiting period. He assumed the check was good and continued on with this business. The restaurant where I work is the same way. We got a bad check the other day. Didn't know it was bad until a week later. Fortunately it was for a small amount and did not affect our bottom line. There is a charge for that check however. In the contractor situation that check was large enough to possibly cause other problems. Wasn't there a situation where people a few years ago were accepting money orders and depositing them only to find out a few days or week later they were no good? Sometimes it takes more than a day or two. I feel that good faith would be to pay it. Everyone writes a bad check at some time, I don't feel this makes them a criminal. Stuff happens.

[skydivingchic]

I have to agree with DayByDay on this one. I have several checking accounts where money I deposit from checks becomes available immediately or the next business day. I have no indication of when the check actually clears the bank it was drawn on (unless of course it bounces). If this was the case for the Contractor and he overdrew his account due to the OP's bad check, I believe the OP absolutely owes him the money. I don't know what laws govern this (and they likely vary by state), but morally OP owes that money. The Contractor should be able to produce some kind of documentation backing up the $270 worth of fees, but assuming he can, OP should reimburse him.

[LivingAlmostLarge]

I agree because it's happened to me. It's shown a cleared check for a few days then 2 weeks later it's rejected.

[mom-from-missouri]

I agree because it's happened to me. It's shown a cleared check for a few days then 2 weeks later it's rejected.

Same here. I have had a renters check show as available funds 3 days after I deposited it, then come back insuf 3 weeks later.

My bank makes the first $100 of a deposit avail at the time of the deposit, then the balance is avail after 48 hours. That leaves you with the impression it has cleared, so I was very surprised when I had a rent check come back 3 weeks later as insuf.

I also had one come back almost a month later as "account closed".

i say he is responsible for the full $270 if he caused it, and needs to pay it with a certified bank check.

[disneysteve]

Wasn't the whole point of that Check21 legislation a couple of years ago to prevent stuff like this and make checks clear faster?

[LivingAlmostLarge]

Yeah right. I haven't seen that. They still want how many days for a cashier's check? Ridiculous.

[wincrasher]

BOA is still holding my cashier's check from closing. 1 whole week - bank to bank. I truly hate those guys right now.

[disneysteve]

BOA is still holding my cashier's check from closing. 1 whole week - bank to bank. I truly hate those guys right now.

As I posted recently, my mom had her bank hold a check for 14 days, cashiers check bank to bank.

[mom-from-missouri]

Wasn't the whole point of that Check21 legislation a couple of years ago to prevent stuff like this and make checks clear faster?

DS,
All I see that came out of that was now stores take it out electronically in front of you and hand your check back to you....(such as Walmart). Seems like when I write a check, I get debted right then. When I deposit one, I have to wait.

Homecome the other guys get their money first???

[nkahlilj]

Thank you all for your responses. You make very good arguments for both sides. I don't believe I owe them, but I think that I will take the moral high road and pay the "provable" bounced check fees.

[disneysteve]

Thank you all for your responses. You make very good arguments for both sides. I don't believe I owe them, but I think that I will take the moral high road and pay the "provable" bounced check fees.

I'll stand by my position. Personally, I think it is morally wrong for him to make you pay for his mistakes. Bouncing the check you wrote was your fault. Him bouncing checks that he wrote was his fault.

[disneysteve]

I posed this question to my cousin. He has been a bank officer for years and has been a compliance officer for about the past 10 years. He said you are absolutely responsible to pay the fee caused by your own bounced check and absolutely not responsible to pay any fees caused by the contractor bouncing his own checks. Those fees are his problem since he is the one who bounced the checks, just as your bounced check is your problem.

You can argue morality all you'd like, but legally he can't make you pay for his mistakes.