Check kiting is defined as
A)indorsing a check while knowing that the check is a stolen check.
B)carelessly paying an unauthorized instrument.
C)a scheme of overdrawing account "A" by depositing a check in account "B," then overdrawing account "B" to cover the insufficient funds in account "A."
D)issuing an instrument to an impostor who negotiates the instrument to a bank that is unaware of the fraud.

Question

Quizplus · Accepted Answer

Check kiting is a fraudulent practice of writing a check from one bank account, depositing it into another bank account, and withdraw the funds before the check bounces. The scheme involves artificially inflating the account balances of the involved bank accounts by taking advantage of the time required for the funds to clear. This practice creates a loop of checks and deposits that may continue for days, weeks or months, allowing the fraudster to use the bank's funds without any actual deposits or available balances.

Check Kiting Is Defined as