Posted by: episystechpubs | August 9, 2018

Editor’s Corner: Kiting

When I think of kites, I usually think of Gasworks Park in Seattle or Seaport Village here in San Diego. I might even be reminded of the song from Mary Poppins—another happy thought associated with flying a kite. I think most of us see kites as a joyful thing, but this brings me to the question of the day:

Dear Editrix,

What do kites and kiting have to do with fraudulent checks?

Sincerely,

Up in the Atmosphere

Dear Up,

I think you’ll see from this article in Wikipedia, that the financial world has applied the fun and playful imagery of floating and kiting to the world of check fraud.

Check kiting … is a form of check fraud, involving taking advantage of the float to make use of non-existent funds in a checking or other bank account. In this way, instead of being used as a negotiable instrument, checks are misused as a form of unauthorized credit.

Kiting is commonly defined as intentionally writing a check for a value greater than the account balance from an account in one bank, then writing a check from another account in another bank, also with non-sufficient funds, with the second check serving to cover the non-existent funds from the first account.

The purpose of check kiting is to falsely inflate the balance of a checking account in order to allow written checks to clear that would otherwise bounce. If the account is not planned to be replenished, then the fraud is colloquially known as paper hanging. If writing a check with insufficient funds is done with the expectation they will be covered by payday—in effect a payday loan—it is called playing the float.

I think I’d stick with playing the piano and floating silk or Mylar kites, rather than kiting paper checks. J

Kara Church

Technical Editor, Advisory

Symitar Documentation Services


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