What does kiting mean in slang?
1. noun, slang A message, note, or letter passed secretly or illegally to, from, or between prisoners. … verb, slang To issue such a check. The CEO was caught kiting checks to keep his business afloat.
Why do they call it kiting?
Generally, the banking term refers to money not reaching its destination, which is similar to the goal of kiting a target in a game. It has also been suggested that kiting comes from “Killing In Transit”, but this is more commonly regarded as a backronym.
How do you determine kiting?
Indications of a potential check-kiting operation include the following: (1) several accounts owned, or controlled, by the same individual, (2) identifiable patterns of transactions, including deposits, transfers, and withdrawals between those accounts, (3) deposits drawn on other institutions by the same holder of the …
What does kiting mean in banking?
Check kiting is the illegal process of writing a check off of a bank account with inadequate funds to cover that check. Check kiting relies on the fact that it takes banks a few days (or even longer for international checks) to determine that a check is bad.
Is kiting illegal?
The consequences of check-kiting
Check-kiting is illegal and is considered fraud. … Sometimes, if the amount of money is paid back, the bank will allow the account holder to keep the account and perhaps remove some features, such as the ability for the account holder to deposit personal checks.
Can I write a personal check with no money in my account?
Knowingly writing a check with no money on your account is also called check kiting. And it is illegal. It’s a fraudulent action that allows people to misuse the system and get access to otherwise non-existing funds.
Is check kiting a federal crime?
But, when kiting involves large amounts or multiple checks, felony criminal charges may come into play. An offender can expect to face both state and federal charges for check kiting, as this fraud is regulated by the federal government.
What is real estate kiting?
Kiting is the illegal practice of exploiting settlement delays to transfer unavailable funds from one bank account to another. In the brokerage industry, kiting occurs when a securities firm fails to settle buy and sell orders by the proper settlement deadline.
What can a company do to prevent kiting?
How to prevent Check Kiting
- Only accept checks for the exact amount owed to you. …
- Wait until the check clears to refund the overpayment. …
- Look into checks that clear your bank account out of sequence. …
- Restrict access to company checks if you’re a business owner.
Is kiting illegal in Canada?
The problem be- came prevalent enough that it was made illegal in certain states of the U.S. by the early 1920s. In Canada, there is currently no provision of the Criminal Code (the “Code”) that specifically addresses kiting.
Do banks prosecute check kiting?
In the United States, check kites are prosecuted under Title 18, U.S. Code Section 1344, which is defined as obtaining the funds of a federal bank under false pretenses. In effect, a check kite is obtaining an interest-free loan from a bank without the bank’s knowledge.
Why is kiting a check illegal?
Under California state law, Penal Code § 476a is how check kiting is prosecuted. … This can occur when one writes a check on an account one knows was closed earlier or one tries to cash a check on an account one knows is empty or insufficient to cover the check.