Ask for a Certified Check
How Does a Normal Check Payment Work?
In your day to day transactions you may choose to pay for an item or service by writing a check. Your bank will honor your check if there are sufficient funds in your account to cover this payment. If you deposit a check received from another in to your account, your account will be credited for the amount of the check if there are funds in the payer’s account to cover this payment.
A check will "bounce" or be returned to the payee, if there are insufficient funds in the payer’s account or if the payer instructs his bank to stop the payment from going through. Dealing with a returned check is unpleasant, time consuming and can entail
fees and affect your account standing with the bank. In short, check transactions are safe when you trust the person or company issuing the check. This is not always the case.
How Does a Certified Check Guarantee Payment?
It is in these situations that a certified check comes in handy. You write the check to the payee in the usual way and then request your bank to certify it. When certifying your check, the bank verifies two things. The bank also makes sure there are enough funds in your account to cover this payment. The bank will either debit your account right away for this amount or reserve these funds to meet this payment. A fee is charged for providing this guarantee.
If you do not have an account with the bank, you can request the bank to provide you with a cashier’s check. In this instance, you pay for the amount of the check and processing fee in cash. Money orders and drafts also work in a similar way and can be obtained from a bank or a post office for a fee.
What Can Go Wrong With a Certified Check?
Any issues relating to a certified check can arise if the signatures are forged, the amount of the check is fraudulently altered after issue or if it carries a forged or incorrect endorsement. If a certified check is lost or misplaced, you should inform your bank immediately. Before the bank issues a replacement check, you will have to provide an indemnity to the Bank relating to any claim that can arise from the previously issued check.
Dealing with a certified check is usually very safe. It is as good as paying with cash. The disadvantages are that you have to visit the bank to have your check certified and the fee that you pay for this service. Other secure and more convenient ways of receiving and making payment are through a credit card or by using an online service such as Pay Pal. Never agree to pay more than the purchase value as there are many scans relating to overpayment of checks. If you have reason to doubt that the certified check you have received is not genuine, contact the bank that issued the check and verify it is genuine by quoting the amount and check number. You can also lodge a complaint or seek help by calling the Federal Trade Commission at 1 877 FTC HELP (1 877 382 4357). A properly prepared certified check should ensure prompt payment and satisfactory completion of a transaction.