TeachMeFinance.com - explain Kiting
Kiting -- in the bank in time to meet the first check. Two or three days
elapse before the second check reaches the bank and before
its arrival another check has been made out and the cash
obtained for it and deposited. So the process continues.
A person engaged in kiting may arrange to exchange checks
with another person. Thus, if he has issued a check which
overdraws his account he makes out a new check and exchanges
it for a check drawn by the other person on another
bank, which latter check he (the first person) deposits in his
own bank to meet his own first check. He may draw and exchange
a third check to meet his second check; and so on.
The person engaged in kiting may gain time by sending
his checks to other places places as remote from the one in
which is situated his bank as possible. The more remote the
places the longer the checks are in reaching the bank upon
which they are drawn for payment.
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