First idea is "Check kiting" is a cash fraud scheme that involves taking advantage of the time it takes for checks to clear in the banking system. The fraudster writes a check from one bank account to another, knowing that there are insufficient funds to cover the transaction. However, before the check is processed and clears, they deposit the same check into another account at a different bank. This process is repeated, essentially creating a cycle of funds that does not exist."

The other idea is: It isn't the same check that gets deposited but it is one for the same amount to a different bank. The fraudster knows it will take a day or two to process. Nowadays, it is probably not as easy to do this because most transactions are electronic and clear rather quickly. Funds could actually have been stolen and the fraudster is trying to cover his/her theft.

Questions:

Who is right and who is wrong? Why right or wrong?

What is check kiting?

Provide an example to back up your idea?

Answer rating: 100% (QA)

Both ideas you provided describe variations of the check kiting fraud scheme but they have some differences in the specifics Lets clarify and compare ... View the full answer