Uncollected Funds
Candlefocus EditorWhile customers often find the charges and fees associated with uncollected funds confusing and sometimes egregious, they do provide an important service to banks and their customers: they eliminate the possibility of cashing a check that is ineligible or not yet cleared by a bank. This is especially important in instances of fraud, in which illegal activity would otherwise remain unknown due to incomplete funds. Therefore, when a check bounces due to the uncollected funds, the charge is levied in the interest of protecting the recipient's account.
In some cases, customers can reduce the risk of being charged for uncollected funds. This may include waiting for a check to clear before making purchases with it, or closing out a checking account once it is no longer in use. Bank customers may also be able to dispute the charges or take other legal actions to get a refund. Additionally, some banks offer overdraft protection plans and other resources to protect customers from these types of charges.
Ultimately, however, it is important to understand that when a check was used with funds that were not cleared, the bank cannot guarantee the money's availability and must protect itself with uncollected funds charges. The fees may seem unjust or excessive, but they do provide some peace of mind for both banks and their customers.