Editing Cheque (section)

== Dishonoured cheques ==
{{Main|Dishonoured cheque}}
A dishonoured cheque is literally one where the payment has not been honoured.  i.e. The payment has been refused by the payer's bank, for many of various reasons. Colloquially, it is referred to as ''bounced''. Such a cheque cannot be redeemed for its value and is worthless; they are also known as an ''RDI'' (returned deposit item), or ''NSF'' ([[non-sufficient funds]]) cheque. Cheques are usually dishonoured because the drawer's account has been frozen or limited, or because there are insufficient funds in the drawer's account when the cheque was redeemed. A cheque drawn on an account with insufficient funds is said to have ''bounced'' and may be called a ''rubber cheque''.<ref name="Garner">{{cite book|last=Garner|first=Bryan A.|title=A dictionary of modern legal usage|edition=2nd|year=1995|publisher=Oxford University Press|isbn=978-0-19-507769-8|page=[https://archive.org/details/dictionaryofmode00garn_0/page/953 953]|url-access=registration|url=https://archive.org/details/dictionaryofmode00garn_0/page/953}}</ref> Banks will typically charge customers for issuing a dishonoured cheque, and in some jurisdictions such an act is a criminal action. A drawer may also issue a ''stop'' on a cheque, instructing the financial institution not to honour a particular cheque.

In [[England and Wales]], they are typically returned marked "Refer to Drawer"—an instruction to contact the person issuing the cheque for an explanation as to why the cheque was not honoured. This wording was brought in after a bank was successfully sued for [[libel]] after returning a cheque with the phrase "Insufficient Funds" after making an error—the court ruled that as there were sufficient funds the statement was demonstrably false and damaging to the reputation of the person issuing the cheque. Despite the use of this revised phrase, successful libel lawsuits brought against banks by individuals remained for similar errors.<ref>{{cite news |url=https://www.independent.co.uk/news/uk/bounced-cheques-yield-libel-damages-1534499.html |title=Bounced cheques yield libel damages |date=21 July 1992 |work=[[The Independent]] |location=UK |access-date=24 September 2009}}</ref>

In Scotland, a cheque acts as an assignment of the amount of money to the payee. As such, if a cheque is dishonoured in Scotland, what funds are present in the bank account are "attached" and frozen, until either sufficient funds are credited to the account to pay the cheque, the drawer recovers the cheque and hands it into the bank, or the drawer obtains a letter from the payee stating that they have no further interest in the cheque.

A cheque may also be dishonoured because it is stale or not cashed within a "void after date". Many cheques have an explicit notice printed on the cheque that it is void after some period of days. In the US, banks are not required by the [[Uniform Commercial Code]] to honour a '''{{visible anchor|stale-dated cheque}}''', which is a cheque presented six months after it is dated.<ref name="ucc4.404">{{cite web |title=Uniform Commercial Code § 4-404 |url=https://www.law.cornell.edu/ucc/4/article4.htm#s4-404 |access-date=17 May 2022 |website=Legal Information Institute |publisher=United States Congress |quote=A bank is under no obligation to a customer having a chequing account to pay a cheque, other than a certified cheque, which is presented more than six months after its date, but it may charge its customer's account for a payment made thereafter in good faith.}}</ref>

=== Consumer reporting ===
In the United States some consumer reporting agencies such as [[ChexSystems]], Early Warning Services, and [[First Data|TeleCheck]] have been providing [[check verification service|cheque verification services]] that track how people manage their chequing accounts. Banks use the agencies to screen chequing account applicants, and those with low debit scores are denied because banks cannot afford overdrawn accounts.<ref>{{cite news|last=Tugend |first=Alina |url=https://www.nytimes.com/2006/06/24/business/24shortcuts.html?pagewanted=all |title=Balancing a Checkbook Isn't Calculus. It's Harder. |newspaper=The New York Times |date=2006-06-24 |access-date=2018-01-23}}</ref><ref>{{cite web|url=https://money.cnn.com/2012/08/16/pf/bank-account-history/index.html?iid=EL|title=Bank customers - you're being tracked|author=Blake Ellis|date=16 August 2012|work=CNNMoney|access-date=29 July 2015}}</ref><ref>{{cite web|url=https://money.cnn.com/2012/07/16/pf/CFPB-credit-reporting/index.htm?iid=EL|title=CFPB to supervise credit reporting agencies|work=CNNMoney|access-date=29 July 2015 |last1=Ellis |first1=Blake }}</ref>

In the United Kingdom, in common with other items such as [[Direct Debit]]s or [[standing order (banking)|standing orders]], dishonoured cheques can be reported on a customer's credit file, although not individually and this does not happen universally amongst banks. Dishonoured payments from current accounts can be marked in the same manner as missed payments on the customer's credit report.