It is important to understand the penalties of a bounced cheque, especially due to the fact that the charges differ from between emirates within the UAE.
For example, in Dubai you would expect a fine from around AED 2,000 – AED 10,000.
This quote nicely depicts what course of action should be taken before entering a business transaction, especially in the case of post-dated cheques being issued.
Cedar Rose offers professional and meticulous investigative due diligence reports which can assist in avoiding financial burdens and untrustworthy counterparties.
The example concentrates on conducting B2C research, which is necessary prior to an agreement.
Before entering into an agreement where post-dated cheques are used it would be beneficial to know your customer well in order to avoid any financial malice.
Post-dated cheques hold an array of problems that may distort the future of your business.
This quote is extracted from a case where a post-dated cheque was misused (full article).
However, within the UAE there are serious factors that need to be considered when using cheques as payment.
If a cheque bounces it is treated as a criminal offence with the potential of jail time, hefty fines and an overall risk to your credit score.