Penalty for Cashing a Check Twice: Legal Action, Fees, etc Explained

With the rise of mobile banking, you can now deposit checks into your bank account just by taking a picture with your phone. But this gives rise to a new problem: duplicate check deposits, which are illegal but often done unintentionally. If you try to deposit a check a second time, your bank may catch the error and stop the check from clearing. However, if the check does clear or you cash it, you should immediately notify the bank of your mistake to avoid fees and legal penalties. Below, we have the details of what may happen if you cash or deposit the same check twice. So is cashing a check twice illegal? It is if you do it on purpose. It’s not something you can easily get away with.

What Happens If You Cash (or Deposit) the Same Check Twice?

Cashing or depositing a check twice is known as a double presentment, and it can happen unintentionally in a couple of different ways:

  1. You may accidentally deposit a check twice on your bank’s mobile app. When the same check is deposited twice at the same financial institution, it’s likely to be caught and rejected by the bank. The bank’s mobile deposit software may immediately reject the second deposit, or it may be found by staff at the bank later. Banks generally scan for duplicate transactions and can cancel the second deposit before any money changes hands.
  2. You may deposit the check via a mobile app first and then, forgetting you previously deposited the check, get it cashed or attempt to deposit it again. Under this scenario, the location where you cashed the check will likely hear from the check writer’s bank at a later date that the check was rejected, and the bank or location where you cashed the check will ask you to repay the check amount.

As mobile banking software has developed, security has not kept up. Systems like TeleCheck or Certegy are designed to prove the authenticity of checks, checking accounts, and the history of check cashers, but they don’t protect from a check being deposited twice. In a recent whitepaper, Chris Swecker, a financial crimes consultant, attorney, and former global security director at Bank of America said, “Even the most rigorous deposit review mechanisms are powerless to identify and reject items that have been previously deposited at other financial institutions.” So until technology catches up with the growth of mobile deposits, cases of double presentment, whether accidental or purposeful, will likely continue.

Below, we have outlined the details of what may happen if you deposit or cash a check twice.

Bank or Financial Institution Penalties

The exact repercussions will depend on how the check was deposited or cashed the second time.

If the check was deposited into your bank account a second time (for example, you deposited the check via mobile app first, then went to your bank and deposited it at a counter), once your bank discovers the error, it will attempt to remove the funds from your account. If you don’t have sufficient money in your account, you may be subject to overdraft fees or low balance fees. If the bank believes you’ve committed fraud intentionally, it may close your account in addition to charging the fees. However, if the second deposit was an honest mistake and you have a good history at the bank, it’s unlikely that they’ll pursue any legal action or close your account, as long as you pay back the amount of the check.

If you cashed the check after depositing it with a mobile app first, there would be a different course of action. The location where you cashed the check will likely hear back from the check writer’s bank that the check has been denied. The consequences will vary based where you cashed the check. If you cashed the check at your bank and it was able to clear before the bank caught the error, the same procedure as noted above will likely be followed. Check-cashing stores may contact you or contact the person/organization that wrote the check to demand repayment. If you don’t repay the amount, the store can take legal action, which we’ll discuss below.

Possible Legal Repercussions

What’s the penalty for cashing a check twice? If the bank or check cashing store suspects you acted intentionally or does not receive repayment from you, it’s also likely that they’ll report you to the local police for investigation. Knowingly cashing or depositing a check twice on purpose is check fraud and can lead to federal indictments. State penalties for check fraud vary, but depending on the amount of the check in question, check fraud may come with a misdemeanor or felony charge, a fine, and/or jail time. In Wyoming, for example, check fraud is a misdemeanor if the check is for less than $1,000, but a felony with a fine of up to $10,000 if the check amount is over $1,000. Colorado also bases its check fraud penalties on the amount of the check. You can search the criminal code on FindLaw for details on the penalties in your state, or (to avoid complicated legal jargon), search “check fraud laws” and your state on your preferred search engine.

Again, if it was an honest mistake and you’re immediately able to pay back the amount of the check, you usually won’t face further legal trouble. If, however, you’re not able to immediately repay the amount of the mistaken deposit, you could be taken to court and be subject to court costs, lawyer fees, and possibly a fine in addition to paying back the amount of the check.

What to Do If You Are Unsure About a Check

If you can’t remember if you have deposited a check already, it’s worth taking a minute to research before attempting to deposit the check. First, look through old bank statements to see if you deposited or cashed the check already. If you have electronic bank statements, you may be able to search by check number or dollar amount to expedite your search. Some online banking accounts will even show an image of the check, so you can be sure you’ve found the correct one.

If you’re unable to find proof of the deposit using your bank statements, you can take the check to your bank. A teller can do a comprehensive search using the routing number, account number, and check numbers on the bottom of the check.

What to Do If You Deposited a Check Twice

If you discover that you accidentally deposited or cashed a check twice, contact your bank or the check-cashing store you visited. Your bank may be able to stop or reverse the payment before money is drawn from the check writer’s account for a second time. If the check has already cleared, contacting the bank as soon as possible shows that you made an honest mistake and didn’t intend to defraud anyone.

Be sure to keep a balance in your bank account large enough to pay back the check. If your transaction was made through the bank, they will likely draft money out of your bank account; if your balance is low, you may be charged overdraft fees. If your transaction was through a check-cashing store, visit the store to repay the check amount.

In Summary

Cashing or depositing a check twice can be a serious offense. Even if you didn’t intend to commit fraud, you might face fees or account closure. Check fraud may be a misdemeanor or felony depending on the check amount, and you may even face legal repercussions. However, you can take steps to avoid legal ramifications by contacting your bank and/or the place you cashed the check as soon as you realize the error, and by paying back the check amount as quickly as possible.

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