Postdated checks are as Israeli as falafel and hummus. When used correctly they’re a tremendous help for cash-strapped individuals and businesses. But when a postdated check is used irresponsibly or illicitly that innocuous-looking piece of paper can become a ticket to financial ruin — as several financially struggling avreichim found out
THE PLAYERS
Name: Mendy and Ilana Shapiro
Age: Mid 30s
Number of Children: 4
Residence: Kiryat Sefer
THE LURE
“Don’t worry about it. Write me a postdated check for $10000 and you’ll not only get your money back you’ll earn a little interest as well”
THE BACKGROUND
For many Israelis postdated checks are a way of life. They use them to pay rent school fees installments on the new fridge and other big-ticket items like simchahs. But while we can understand why cash-strapped individuals use them what do the businesses gain by accepting postdated checks?
The answer is that Israeli banks will accept postdated checks as collateral allowing businesses to increase their available line of credit based upon the value of the checks they’ve deposited in their account.
