Find out exactly how long it takes various types of checks to clear once you have deposited them and also exactly how much water has to flow under the bridge, so to speak, before your bank can no longer debit your account if the check bounces or turns out to be a fake.
Bank policies vary immensely from country to country, but here is a (very) rough guideline to how long it takes for a check to clear in most civilized (and computerized) countries:
Personal check, same country (or state) 1 to 3 days
Personal check, foreign origin, local currency 8 to 10 days
Personal check, foreign origin, foreign currency 2 to 3 weeks
Cashier’s check, same country (or state) same day
Cashier’s check, foreign origin, local currency about 3 days
Cashier’s check, foreign origin, foreign currency about one week
The reason for the discrepancy between the clearing time for a personal and a cashier’s check is, of course, that cashier’s checks are considered a lot “safer” by banks. An individual or even a company may not think twice about passing bad checks, given sufficiently tight circumstances, whereas manufacturing and passing a bogus (fake) cashier’s check is not only considered fraudulent – it is also classified as forgery and carries severe penalties for the perpetrator, if caught.
If you are (or expect to be) on the receiving end of a lot of checks you should huddle down with your bank liaison officer and get the low-down on local bank regulations and policies concerning clearing periods etc.
When you have taken a photocopy of a check you’ve received, file it in a place where you won’t forget about it. If you are constantly on the move it may even pay to use a hand-held scanner and store an image of the check in the memory of a portable computer that you take with you on the road. The reason, if you call home to “touch base” with the office and learn that an important check has bounced, you will be able to take personal charge of the matter immediately with the image of the check on the screen before you. Unless you know that it’s unadvisable to get too heavy-handed with the bum check artist (and, thus, prefer to coax him into paying up willingly) you may then immediately get in touch with your lawyer or even the police if need be.
If you learn about a check having bounced on you while on an extended stay abroad there are still things you can do: call up the customer’s bank, for instance (or just threaten him with doing so) to ask whether there is any chance that the check might be honored if presented once more. In certain cases a delay of just a couple of days may mean that the account is totally depleted – but if you act immediately and decisively you (or your lawyer) may have the account frozen, sometimes overnight, and at least get whatever is left in the account even if it is not the full amount you’ve been stiffed on. At any rate, when stuck with a bad check it is definitely not the time to play Mr Nice Guy. Rather, hit the perpetrator with the legal and financial equivalents of “the wrath of Gods”. It may not win you a lot of friends but, then, friends are not what you are in business to make.
Lastly: if you truly have little reason to fear that your government (or anyone else) will ever subject your finances to scrutiny (as may be the case if, for instance, you live in a tax-haven) then you may find it more expedient to pay various bills by mailing a check. It may even be safe to do so if you have otherwise guarded yourself thoroughly against government intrusion on your privacy such as, for instance, if you officially live in one country while in reality living and pretending to be a tourist in a second. There are legitimate and semi-safe uses for checks even if you are playing cat-and-mouse with the tax-collectors in your home country, as long as you do not keep your main stash in a bank that can be linked in any way to your checking account.
If you still want to simplify your life a bit by using checks, and if you have other safeguards in place, you might as well go the whole hog and get a checking account which allows you to write checks in any currency but still using only one checkbook. Many offshore banks in tax- havens like Andorra and the Isle of Man offer checkbooks to their customers with no currency printed on the checks. That’s right. A typical offshore check will read “pay, to” and all you have to do is fill in the blanks – including the currency! The account itself, of course, will have to be maintained in one currency or another and usually this may be just about any one you want: US dollars, British pounds sterling or Japanese yen. This greatly simplifies your life if you need to pay bills in different currencies. Pay your subscription to the Economist by sending a check made out in pounds sterling, pay your subscription to Cambio 16 in Spanish pesetas and your grocery bill in the local currency, whatever that may be.