How to Collect Bad Check

by : Brad Price

How do most businesses deal with bounced checks? Some contact their local District Attorney and ask the Prosecutor's office to help collect a bad check. While the District Attorney can be a good option in some cases, this usually requires some paperwork and the collection process can be very slow. Others try to make phone calls and send out letters, tactics which are also often ineffective.

There are services that will actually purchase NSF checks. Businesses often receive a certain percentage of a NSF check's face value. This is an easy way to dispose of some NSF checks. Another choice for many businesses is a "check guarantee service." These are like an insurance policy (several businesses pay into the guarantee service every month and the payments help offset the loss from the returned checks). Unless a business mainly receives high dollar checks (several hundred to several thousand dollars per check), these services benefit only one party: the check guarantee service. Why pay a company to accept checks?!

For most businesses the best choice is a bad check collection service. There are many check collection companies to choose from; a partial directory of check recovery services is available at (see the bottom of this page). In some cases a check collection service will work with your local District Attorney.

If you are considering a check collection service, you may want to learn a little about your "state bad check fee" (see for this information). The state bad check fee is a cost paid by bad check writers and it is the way many check recovery services make their services free to businesses.