A check is a physical, legal contract that effectively represents a promissory note to pay the amounts indicated in numeric and written values, to the payee designated in the “pay to” section. Your signature authorizes the amount indicated to be withdrawn from your bank account and transferred to the payee’s account where the check was presented for deposit.
A voided check may be requested by an employer for direct deposit set up or creditor for direct debit. The organizations need the information on the check, but not an actual payment from it. A check may also need to be voided for errors in dates, payee information, or amounts. Banks prefer such errors are voided and a new check written to avoid “edits” that raise concerns. Checks are vulnerable to fraud as the “payor” (you – the account holder) does not need to be present for someone else to deposit a check to their accounts. Therefore, keeping control of the location of your checkbook and an accurate inventory of checks is critical.
Take the following steps when voiding a check:
** NOTE if a check has already been given to a payee, the only way to cancel it is to contact your financial institution and request a stop payment for a fee.
Voiding a check involves rendering the legal contract un-usable. Correctly voiding a check is critical to avoid fraud and having unauthorized funds withdrawn from your checking account.