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I deposited a third-party check and spent some of the funds. My bank has now informed me that this check was returned unpaid due to non-sufficient funds (NSF) and that I am liable for the entire amount. Is this correct?

If your bank credited your account for a check that was later returned unpaid for insufficient funds, the bank can reverse the funds and may charge a fee. As the payee, you must pursue the maker of the check if you wish to seek reimbursement.

A tip that can help avoid this scenario: Use caution when accepting a check from someone you don't know.

Last Reviewed: October 2020

Please note: The terms "bank" and "banks" used in these answers generally refer to national banks, federal savings associations, and federal branches or agencies of foreign banking organizations that are regulated by the Office of the Comptroller of the Currency (OCC). Find out if the OCC regulates your bank. Information provided on HelpWithMyBank.gov should not be construed as legal advice or a legal opinion of the OCC.

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