Function

• Check verification helps a business determine the likelihood that the drawer's account has sufficient funds available to cover a check, based on whether he has written bad checks in the past.
  
  

Significance

• There is no guarantee that a checking account will have the funds to cover a check. Check verification can only help reduce the chance of receiving a "bad check," or a check that will not be paid.
  
  

Types

• The oldest check verification system, the negative check database, is used by many businesses. This system uses your driver's license number to see if you have written bad checks before. Tracking habitual check bouncers through their drivers' licenses makes it easier to quickly identify them, and that helps prevent losses.
  
  

Considerations

• There are flaws in check verification systems. Problems can arise and tempers can rise if a good check is denied because the drawer's name is listed in the negative check database. Once your name gets into the negative check database, removing it can be difficult, since the database goes back 10 years. Another check verification system identifies the status of a checking account, ensuring that the account is still open, thereby reducing the chances that the check will bounce.
  
  

Misconceptions

• Many individuals and businesses believe that if they need to verify a check, they can call the check drawer's bank. Due to enhanced privacy policies, many banks refuse to verify whether there are funds in an account to cover a check. Other banks may only state if the checking account is open or has a positive balance.