When Paul decided to attempt to make a purchase without having sufficient funds to do so, he was committing fraud. Because the amounts in question are small, it is unlikely that he would immediately face legal action. In the short term, the probable consequences of sending the check would be that he would not succeed in making one or more of his intended purchases. Depending on the bank and the type of checking account Paul has, the bank could return a check for insufficient funds or honor the check through an overdraft. Either of these situations will often generate a fee that is automatically charged to Paul’s account, thereby reducing his balance. In turn, this could result in his having insufficient funds to cover the next check he writes.

This process creates a snowball effect which could prove very costly. The affected vendor or vendors could charge Paul a fee as well as not sending the item, refuse to do future business with Paul, or even take legal action. The bank could request that Paul change specific features on his account or switch to a different type of account. For example, if the account did not already have overdraft protection, the bank could suggest that he add it to reduce the chances of this problem occurring again. This service might incur a monthly charge.

If Paul is unwilling to make the required changes, the bank could close his account. While a single returned check will have a minimal impact, repeatedly engaging in this behavior will damage his credit score and make his future financial dealings—such as obtaining credit cards or a mortgage—much more difficult and expensive.