KITED CHEX Meaning and
Definition
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"Kited Chex" is a term used in the field of banking and finance to refer to a fraudulent practice involving the manipulation of checks or funds within the banking system. The term "kited" is derived from the act of flying a kite, where one can keep a lightweight object afloat by controlling the strings. In the context of banking, it alludes to the act of artificially inflating account balances by exploiting the time delay in check clearing.
In a kited chex scheme, an individual or entity writes a check or issues an electronic payment from one bank account to another, knowing that there are insufficient funds in the originating account. However, before the funds are debited from the account, the individual deposits the same check or funds into another account at a different bank. This results in an inflated account balance in the receiving bank, which can then be used for various purposes, including withdrawal of cash or covering other checks.
The scheme heavily relies on the time it takes for banks to process and clear checks, usually involving a three-day clearing period. During this time, the individual attempts to maintain a positive balance by repeating the process of depositing bad checks or funds into different accounts, effectively keeping the funds circulating between multiple banks.
Kited chex is a form of financial fraud that seeks to exploit the time delay in check clearing, resulting in the unauthorized inflation of bank account balances. It is deemed illegal and punishable under banking regulations and laws, as it ultimately leads to substantial financial losses for the affected institutions.
Common Misspellings for KITED CHEX
- kited chek
- jited chex
- mited chex
- lited chex
- oited chex
- iited chex
- kuted chex
- kjted chex
- kkted chex
- koted chex
- k9ted chex
- k8ted chex
- kired chex
- kifed chex
- kiged chex
- kiyed chex
- ki6ed chex
- ki5ed chex
- kitwd chex
- kitsd chex
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