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Post-Dated Checks: Can Creditors Cash Them Early?

Many consumers feel comfortable in the practice of sending their creditors post-dated checks. It stops them from calling at home and at work, and they assume that the check won’t be cashed until the date at the top. Unfortunately, however, most creditors cash thousands of checks each week. It is impossible for a bank or credit union to examine the dates on every one of those checks to make sure none are post-dated.

If you have been in debt for any length of time, you know that creditors and collection agencies will do (and say) whatever they can to squeeze money from your bank account. From threatening legal action to making demands that cannot be legally enforced, consumers often feel like punching bags where creditors are concerned. One of the things that creditors will often demand is a post-dated check, and there is no law restricting them from this practice.

Even worse, some creditors will demand post-dated checks over the phone. You read off your account number and then tell them how much you will agree to pay. Once you’re off the phone, however, the creditor can fill in whatever amount he or she wishes and may not post-date the check at all. This is why giving payments over the phone is dangerous.

In addition to risking the early cashing of your post-dated check, giving your checking account number over the phone opens you up to the possibility of identity theft. You have no idea if the person on the other end of the line is a trustworthy employee of the collection agency or a criminal who scams account numbers when his boss isn’t looking. It’s also entirely possible that the employee in the next cubicle is unscrupulous, so don’t put yourself in this position.

Instead of giving a creditor a post-dated check, you’re better off sending a payment with certified funds as soon as you are able. Not only does this conceal your account numbers, but it also prevents the possibility of an overdraft on your account. If the creditor were to cash your post-dated check early, you wouldn’t have any legal recourse against them.

You should also know that many creditors are now using electronic check-cashing systems, which means that your account information is entered into a computer and processed immediately. The funds can be withdrawn from your account in a matter of minutes (rather than a few days with traditional check-cashing methods), and you’ll have no way to recover that loss.

If you feel obligated to send a post-dated check to a creditor, don’t give the representative your checking account number over the phone. Instead, write out a check as normal and write POST-DATED in large letters across the top of the check. This way, the bank will be more likely to catch it if the creditor tries to cash it early. Plus, the creditor can’t say that he didn’t realize the check was post-dated since you displayed it prominently for all to see.

When it comes to debt collection, it is vitally important for all consumers to understand their rights, particularly those that deal with abusive collection agencies. When you are threatened repeatedly by a creditor, you have every right to insist they not call back and to report them to the FTC. Abusive collection practices are in direct violation of the Fair Debt Collection Practices Act and creditors can find themselves in hot water.