Discover the Meaning of ‘Kiting’: A Look inside the Legal Definition

Simply put, “kiting” refers to the act of taking advantage of delays in the availability of funds which arise due to banking transfers. It occurs when someone writes a check for an amount which far exceeds the amount currently in their checking account. The hope is that the check will clear in time for when the money in the account is replenished from the transfer.

One common example is an individual who engages in kiting by writing a check for a larger-than-normal payment before their salary hits their account. This person is taking a gamble that the check will clear by the time their salary hits the account. Another example is a proxy check, where funds start in one financial institution and are temporarily stored in another. Kiting can also involve the use of credit cards.

This practice is not illegal in all cases, but it can lead to criminal charges in certain instances. For example, an act of kiting that involves the use of fake or forged cheques is considered a crime in some jurisdictions, even if it was done with the intention of covering an individual’s financial obligations.

Kiting as a Criminal Offence

Kiting can result in a range of consequences, from the fairly innocuous to criminal charges. It should be noted that while choosing to engage in the practice of kiting may result in various fees and penalties, these consequences are usually limited to the civil sphere.

However, if the intent of the kiting activity is considered illegal or fraudulent, criminal charges may be brought up against the individual. The consequences of such activity can include incarceration, a criminal record, and considerable damage to the individual’s reputation.

Understanding the Legal Implications of Kiting

Kiting can have serious legal implications and is not as simple a concept as it may first appear. As such, it is important to always remain aware of the potential risk of engaging in this practice before taking any action. Here are some key takeaways to keep in mind:

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• Kiting can be done legally in some cases, albeit with potential financial penalties.
• In some instances, kiting can become a criminal offence.
• It is important to keep in mind the legal implications of kiting before engaging in any activities.

Related Legal Concepts

Understanding kiting often intersects with other financial crimes such as harassment by creditors when payment issues arise, and may escalate to hate crime considerations if targeting specific groups. The practice can also involve harmless error in documentation versus intentional fraud, and may be pursued by habitual criminal offenders as part of broader financial schemes.

The Bottom Line

Kiting represents a complex financial practice that can range from relatively minor banking violations to serious criminal fraud depending on the intent and methods involved. While not always illegal, the risks of civil penalties, criminal charges, and reputational damage make it a practice requiring careful legal consideration. For guidance specific to your situation, always consult a qualified, licensed attorney.