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It’s Not Just You: Writing A Check Can Be Tricky

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Between credit cards, online payment services, and good ol’ cash, many consumers have sequestered their checkbooks into cupboards and drawers that seldom see the light of day. Still, not everyone has left their checkbooks to waste away; many consumers use the notebooks from time to time, whether it be paying a bill, rent, or other expenses where plastic or cash aren’t options. 

Writing a check — even infrequently — is a pretty straightforward endeavor: Put someone’s name down, add a date, write an amount both numerically and spelled out, and sign on the bottom line. But even the most seasoned check writer — are there any out there still? — might run into a few problems, some of which could cost them.

First, The Basics

Unsurprisingly, in order to learn how to and then actually write a check you must first open a checking account.

Opening an account is a fairly straight-forward endeavor. Perhaps start by getting a recommendation from friends or family members who already have such accounts.

While looking at different banks, make sure to examine the fees they charge, services they offer, and any minimum requirements for accounts, such as a monthly deposit or minimum monthly balance, the Consumer Financial Protection Bureau suggests.

For more tips on what to consider when opening a checking account, the CFPB provides an easy to follow checklist.

Once you open your checking account, you’ll get a debit card, but also checks.

Whether or not you use these checks, that’s your choice. In fact, it’s a choice that many consumers are passing on.

Declining Check Use

According to the Federal Reserve’s 2016 Payment Study [PDF], the number of checks and their value have fallen significantly in just three years.

For instance, the 17.3 billion checks written in 2012 were valued at $26.83 trillion. In 2015, consumers wrote just 2.5 billion checks worth about $380 billion.

The change, the study notes, is related to the transformation of non-cash payment systems; as Americans once relied on checks, they now rely on credit cards.

The annual number of check payments is estimated to have declined by 800 million per year since 2012. That’s a smaller decline than the previous decade, when check payments declined by about 1.9 billion per year.

With fewer Americans using checks as their most common mode of payment, it might not come as a surprise that many consumers don’t know how to write the darn things.

A 2013 survey from WePay, a payment solution company, found that 52% of millennials have never used a check. Likewise, a study from Bank of America suggests that likely won’t be changing, as 71% of Americans believe that children under the age of 10 won’t know how to write a check in the future.

How To Write A Check

In order to properly write a check, you first need to know what each part of the check means and how it should be filled out.

1. The Date: Near the top right hand corner of a check is the date line. Here is where you will write the current date.

In the event you want the check to be cashed at a later time, you can write a future date on the line — this is a practice known as post-dating. However, this post-dating doesn’t always work, we’ll get into this later.

2. Payee: The top middle potion of the check includes the “Pay to the order of” line. Here is where you would write the name of the person or company you are paying.

3. Courtesy Box: On the right, middle portion of the check you’ll find a number sign followed by a small box. This is where you write the amount of the check numerically. Make sure you fill the entire box with your amount, lest a fraudster add to the amount.

4. Pay Line/Legal Line: The middle line of the check is known as the pay line, the place where you write the amount of the check using words. This serves as the official amount of your check, as we’ll learn later.

5. Memo Line: In the left bottom corner of the check, you’ll find the optional memo line, where you can add details about the payment. For instance, if you’re writing a check for rent, you could add “Rent For May.”

6. Signature: The right bottom corner of the check serves as the signature area. Here you would sign your name. Without doing so, the check is invalid and can not be cashed.

Simple enough, right?  Maybe, but with more and more consumers ditching checks, or never learning how to write them in the first place, they might not be aware of some of the nuances that come with making out the form of payment.

The Check Date Doesn’t Mean Much

Because they might not always have enough money in their accounts on the day they write those checks, some folks will postdate their checks so that they aren’t deposited or cashed until after a certain date.

Unfortunately, the fact is that there’s generally no actual obligation to honor the date on a check.

Although it might not seem right for a bank or credit union to disregard the date written on a check, they aren’t legally required to honor the request to postpone processing a transaction unless certain conditions are met by the check issuer.

That’s because once a check is signed it becomes legal tender, and, according to the Consumer Financial Protection Bureau, banks and credit unions can generally use their own discretion when deciding when to process a check – all without regard to the check’s printed date.

The only way to possibly prevent a postdated check from being processed early is to let everyone involved know in advance — and in a format that goes beyond just postdating the check.

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 some states, if a consumer gives the financial institution reasonably timed written notice about a postdated check before the check is received, then the notice is valid for up to six months.

That means the bank must wait to cash the payment until the date stated on the paper or until six months is up, whichever comes first.

But if the consumer gives oral notice to the bank, the institution must only wait 14 days before processing the note – even if that happens to be before the date on the check.

Additionally, the only time a bank can be held liable for processing a postdated check before the indicated date is if that notice is still valid. In which case, the CFPB says the institution may be on the hook to cover damages such as the cost of overdrafts and other fees.

Further complicating matters is the fact that many retailers and service providers now use remote deposit capture, Adam Rust, director for Reinvestment Partners, tells Consumerist.

“If you have ever noticed how a cashier runs a check through the register, you should realize that the terminal is making a photograph of the check and send it to the retailer’s bank,” he notes. “The money could be debited from your account by the end of the day.”

Consumers should be careful to know their balance before they post-date a check, as doing so may not protect them for an overdraft fee, Rust says.

Words > Numbers

When filling out a check, you include the value in not one, but two places. In a box on the left side of the check you write the value numerically, then on the second line in the middle of the form you write out the cost in words.

Simple enough, right? While it might seem that way, there is one hiccup you could encounter. If the numbers you write and the words you fill in don’t match, what happens?

According to the CFPB, the check is still valid, and the written words are considered to be the correct amount.

But why? Under the Uniform Commercial Code, a set of rules for business transactions, if there are “contradictory terms, typewritten terms prevail over printed, handwritten terms prevail over both, and words prevail over numbers.”

The Balance points out that the actual names for these parts of a check echo this reasoning. For instance, the box you write digits in described as the “courtesy box,” but the pay line is called the “legal line.”

Watch Out For Fraudsters Changing Check Amounts

As we just found out, words trump numbers, but what if someone trumps both by changing the value of a check all together?

Sure, this might not be an easy feat, but it is possible: A ne’er-do-well could turn a $20 check into a $120 check by cramming an extra “1” before your value and writing “one hundred” before the “twenty” on the written line.

This action is considered check forgery, a felony in all 50 states that is punishable by a range of penalties.

For instance, under Washington state law, this practice would be considered an alteration of a written instrument:

“To ‘falsely alter’ a written instrument means to change, without authorization by anyone entitled to grant it, a written instrument, whether complete or incomplete, by means of erasure, obliteration, deletion, insertion of new matter, transposition of matter, or in any other manner.”

If this were to occur, the CFBP urges customers to contact their bank or credit union immediately.

If your bank or credit union cashed the check, individuals may be able to have the difference restored to your account. However, they would still be responsible for the original amount of the check.

The CFPB notes that if the check was processed as an electric transfer, customers may have additional protections under federal law.

There Are Two Names On My Check; What Now?

From time to time you might receive a check addressed not only to you, but to someone else, as well.

Perhaps you just got married and your grandma — the one who still writes checks — gifted you with a little something. But to ensure you knew the gift was for both of you, she included your name and your husband’s.

According to the CFPB, there’s nothing wrong with this. In fact, it’s totally fine, the only thing you need to know is whether or not you both need to endorse the check.

To determine this, the CFPB notes that individuals must first read the check.

For instance, if the check says John AND Jane Doe, then both individuals must sign the check. If the check is made out to John OR Jane Doe, then either person can cash or deposit the check.

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