Quick Definition

Kiting refers to the illegal practice of exploiting the time delay in the clearing of checks to artificially inflate bank account balances.

Examples

• 1A person writes a check from Bank A to deposit into Bank B, despite knowing there are insufficient funds in Bank A, intending to cover the shortfall with another check from Bank B.
• 2A business issues payroll checks from a bank account that lacks sufficient funds, planning to cover the deposits with incoming customer payments.
• 3An individual repeatedly transfers funds electronically between two online accounts to take advantage of the temporary availability of funds.

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