Are Post-Dated Checks Still an Effective Form of Security? In Dubai, Maybe Not.

A rise in using cheques for payments has occurred due to the high fees on electronic transfers. However, within the UAE there are serious factors that need to be considered when using cheques as payment. If a cheque bounces it is treated as a criminal offence with the potential of jail time, hefty fines and an overall risk to your credit score. Thus, it is pivotal to comprehend the pros and cons of using cheques, and, especially, when writing post-dated cheques. A potential benefit of this payment method is how it can foster healthy and long-lasting business relationships. When you are able to rely on a supplier and it is possible to pay with post-dated cheques, with full confidence that the transaction will be honoured, you can assure a robust financial future. Furthermore, your B2B relationship will inevitably strengthen with frequent transactions via cheques, if and only if, they are honoured. Small and Medium-sized Enterprises SMEs often rely on post-dated cheques, thus for a sturdy cash-flow, it is essential that cheques do not bounce. Before entering into an agreement where post-dated cheques are used it would be beneficial to know your customer well in order to avoid any financial malice. It is important to understand the penalties of a bounced cheque, especially due to the fact that the charges differ from between emirates within the UAE.

What Is The Legality Of A Postdated Check?

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Accepting a postdated check from a tenant may seem like a surefire way to get the money that you are owed, but this does not always lead to payment and sometimes may even lead to further complications. Unless you are percent sure that the tenant can be trusted and that there will be funds to cover the check when it is ready to be cashed, it may not be a good idea to accept a postdated check. The Uniform Commercial Code states that a bank may honor a postdated check provided the check is otherwise safe to cash and the account owner has not provided the bank with “reasonable notice of the postdating.

This means that a tenant may legally postdate a check to you and that you may even be able to cash it when you receive it, but if the bank has been notified of the postdating you will have to wait until the date listed on the check instrument before you may receive the funds. While it may be a crime for a tenant to write a check when there are insufficient funds in his account to cover the check, California’s worthless check laws may not cover a landlord if a postdated check was accepted.

According to California’s bad check law, writing a check with the intent to commit fraud or knowingly writing a check when there are insufficient funds to cover the full amount of the check are both illegal. However, if the tenant writes the check with the intent to have funds in the account on the date that the check is postdated for, there is no intent to commit fraud or pass a worthless check and therefore no illegal activity has technically taken place.

Accepting a check that is postdated may provide the tenant with a legal defense that negates criminal intent even if the check doesn’t clear. As a landlord, collecting a check that has been postdated could be dangerous. The tenant may know that he or she will not have the money in time, the check could have a stop-payment placed on it, or the check may bounce. Waiting to cash a check that has been postdated provides the tenant with time to make other living arrangements, move out or otherwise abort the lease agreement.

In situations in which the tenant can be trusted, the landlord has known the tenant to be an honest, on-time payer or the landlord otherwise believes that the money will be in the tenant’s account on the date the check posts, accepting a postdated check can be beneficial. A postdated check does show the tenant’s will to pay, and if the funds are in the account on the date the check is cashed the landlord will receive the money.

Can a bank or credit union cash a post-dated check before the date on the check?

Thinking the offer might expire, and aware that the funds represented by this cheque were tied up elsewhere, you enclosed a postdated cheque with your application. But as this cheque was cashed earlier this meant that your current account went overdrawn, so you incurred bank charges and a small loss of interest. You still felt hard done by, though.

BM Savings points out that its procedure is to cash cheques on receipt. Owing to the number of cheques received it does not have a process in place that identifies postdated cheques. Help protect yourself from Identity Fraud with CreditExpert.

INTRODUCTION CONCEPT OF A POST-DATED CHEQUE According to S.6 of the Negotiable Instruments Act, (herein after called.

I wrote a post-dated check to cover an IOU. You could go after the person you wrote your check to, on the grounds that he broke an agreement to hold off on cashing the check. Post-dated checks are perfectly legal. 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. Processing 45,, checks a day is tough enough, without looking at dates. As always, putting it in writing is best. That would include any bank fees and damages caused by an improperly overdrawn account.

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Next Last. Landlord requesting post dated cheques at extension of tenancy agreement I’m on a 12 month fixed post-dated tenancy agreement. Next month comes the end of fixed term and the tenancy agreement will be turned to a month-to-month term. Landlord is requesting 12 cheque dated cheques to cover the next 12 need of rent. Is that fine?

For all practical purposes, there is nothing wrong with writing a post dated check. The person writing a postdated check may violate the law if.

Most shops garages and restaurants will accept payment by cheque, although it is not universally the case because of problems with bounced and stolen cheques. If as seller does not accept cheques, or they accept only on a conditional basis, then a notice should normally be displayed on the premises. You are potentially liable to criminal fines and banned from being able to use write a cheque for up to five years. However, the rule is not a draconian as may appear, for most banks make every effort to avoid giving grief to their clients.

So, if it does happen to you, then the reaction of your bank is likely to depend on the circumstances and the relationship you have with them. If there are funds in your deposit account, you may well find they will contact you about the matter to make a transfer between the accounts. They may also insist on the return of the cheque book until the account has been restored into credit. Within certain limits banks are free to charge their own fees for unpaid cheques. There may well be other penalties in the event of further breaches.

If you are paying a large sum by cheque or you are nervous about being paid by cheque then it is possible to obtain a bank guarantee cheque in the same manner as is the case in most countries. There will be a charge for this service. It is also illegal at least technically!

Postdating Checks Is a Waste of Time — Here’s Why

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Post-dated checks (including undated signed checks, are referred to in this article as “PDCs”) are a longstanding form of security in.

Today I notice that both cheques have been cashed at the same time. I telephoned the bank and they told me that I was breaking the law writing a cheque with the wrong date on it and that It was illegal!! Yes That right. I thought that was good!! That’s what I’ll do next time; it was an urgent emptying of the fosse septic at the weekend and the driver suggested we might like to pay in two halves! As someone says, it’s illegal to utter a cheque if you don’t have the funds in your account to cover it!

Discussions General Post dated cheques. Recent Discussions. Post dated cheques 4 Replies. Lesgreens Message. I asked last week if I could pay in two installments and was told “yes” so I gave two cheques. Changeover and cleaner. Lesgreens That’s what I’ll do next time; it was an urgent emptying of the fosse septic at the weekend and the driver suggested we might like to pay in two halves! Your Name.

What Happens When You Deposit a Post-Dated Check Early?

One noteworthy topic had to do with post-dated checks and what happens to them when you attempt to deposit or cash the checks before the date written on them. Curious as to what happens when I defy the concept of post-dating, I checked with banks to their rules on the matter. When you post-date a check, you put a future date on the check with the idea that the recipient does not deposit it until that written date.

However, I do expect to have those funds by the date written on the check. So, I post-date the check so that the check recipient knows not to deposit that check until that date.

Post dating cheques illegal uk. For more details, see. Find out if the check was intentionally postdated, and figure out a solution. However, a bank may refuse to.

One of the myths that somehow refuses to go away is the myth that post-dated checks are “illegal. There is nothing illegal, inappropriate, unlawful, unethical, unprofessional, or unconscionable about a creditor asking a customer to issue a post dated check, nor is there any reason a customer cannot issue one or a series of post dated checks to clear a past due balance. There are several advantages to taking postdated checks in settlement of an account balance including these:. The fact that you are holding a check that will be presented to the bank for payment on a specific date places a burden on the debtor to have funds on deposit when the check is presented.

In the event that the check is dishonored and the customer is sued, the existence of the check makes it harder for the customer to argue that the debt was never owed. Even if a post dated check is not honored when it is first presented, there is always the possibility that the check will clear at its second presentment, or that the creditor can tender the check to the debtor’s bank on a collection basis.

There is a down side to accepting post dated checks

Federal Register of Legislation – Australian Government

Every time someone begins to negotiate a lease for a residential premise, the issue of security deposits and post-dated cheques needs to be dealt with. Consumers are often unaware of their rights and obligations and so have an unequal bargaining position with a potential landlord. Here are some comments on both issues.

if it was february, then 2 points. it is illegal to postdate a cheque although a lot of people do and the banks reserve the right to cash a postdated.

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Should payment be done via post dated cheques??- Property Hotline