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Instead, consumers could seek alternative measures such as a small-dollar loans from a credit union or community bank, inquire about a pay advance from their employer or work out a payment plan with the company or individual they are paying.
In addition to understanding the risks and potential issues with providing a postdated check as payment, consumers should be cognizant that it is illegal to intentionally write a bad check.
The following question was submitted to John Roska, an attorney/writer whose weekly newspaper column, "The Law Q&A," ran in the Champaign News Gazette. The person didn’t wait to cash it like he was supposed to, and my bank paid it, which caused several other checks to bounce.
Am I responsible for all the bounced check fees, since the checks wouldn’t have bounced if the bank had waited like it was supposed to before cashing it?
There’s one exception to the general rule that lets banks cash post-dated checks.
That’s if you warn your bank ahead of time about your post-dated a check, so it knows to be careful.
Pamela Banks, senior policy counsel for our colleges at Consumers Union, tells Consumerist that sending a postdated check can be an indicator to the recipient that the check-writer is in dire financial straits.
Of course, even this preventative measure isn’t foolproof, as rules governing banks vary from state to state depending on the two types of notification given, the CFPB says.
In which case, the CFPB says the institution may may be on the hook to cover damages such as the cost of overdrafts and other fees.
Consumer advocates who spoke with Consumerist say that while there are several reasons someone might think it’s a good idea to use a postdated check, it’s not generally recommended.
But just about anything with the right signature on it is properly payable, including post-dated and overdrawn checks.
Post-dated checks are a risky form of do-it-yourself credit.