Check Kiting

Posted by Guest Blogger "Sayf Maslul"


Definition of 'Kiting'

Check Kiting is the illegal act of taking advantage of the float to make use of non-existent funds in a checking or other bank account; it is a form of check fraud. 

It is commonly defined as intentionally writing a check for a value greater than the account balance from an account in one bank, then writing a check from another account in another bank, also with non-sufficient funds, with the second check serving to cover the non-existent funds from the first account.

The purpose of check kiting is to falsely inflate the balance of a checking account in order to allow written checks that would otherwise bounce to clear.

If the account is not planned to be replenished, then the fraud is known as paper hanging instead. [Wikipedia]

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The Federal Reserve is buying its own debt with more debt since China has stopped buying ours.

If you ever did that, they’ll call it “Check Kiting” and arrest your ass!!!