Bounced Cheques Australia 2025: Penalties, Prevention & Consumer Rights

Bounced cheques might sound like a relic from a bygone era, but in 2025, they’re still part of Australia’s financial landscape. While digital payments have all but taken over, paper cheques haven’t disappeared—and when a cheque bounces, the consequences can be both costly and stressful. Here’s what every Australian needs to know about bounced cheques this year, including new policy updates, penalties, and smart ways to safeguard your finances.

Understanding Bounced Cheques: Still Relevant in a Digital World

Despite the rise of instant transfers and tap-and-go, cheques remain in use—especially for business payments, property settlements, and some government transactions. A bounced cheque (or dishonoured cheque) occurs when the account it’s drawn from doesn’t have enough funds to cover the amount. The bank refuses payment, and both the cheque issuer and recipient are left in a tricky spot.

• Common causes: Insufficient funds, closed accounts, signature mismatches, or errors in cheque details.

• Who’s affected: Small businesses, landlords, and older Australians are more likely to encounter cheques in 2025.

While the Australian Payments Network reported a continued decline in cheque usage (down over 85% from 2015 levels), the risks and responsibilities around bounced cheques haven’t vanished.

2025 Policy Updates: Penalties and Consumer Protections

This year, the Australian Securities and Investments Commission (ASIC) and major banks have tightened rules around cheque clearing and dishonour processes. Here’s what’s changed in 2025:

• Faster notification: Banks are now required to notify both parties of a bounced cheque within 24 hours of dishonour, reducing confusion and delays.

• Higher dishonour fees: Most major banks have increased bounced cheque fees in 2025, with charges now averaging between $25 and $50 per cheque.

• Record-keeping: New regulations require cheque issuers to keep digital records of all issued cheques for at least seven years, improving dispute resolution.

• Consumer rights: The ACCC has updated guidelines to clarify consumer recourse when a cheque bounces, particularly for deposits and rent payments.

For example, if a tenant’s rent cheque bounces, landlords must now provide written notice and allow a minimum five-day grace period before taking further action—part of a broader push for fairer rental practices nationwide.

Risks, Costs, and How to Protect Yourself

Bounced cheques can lead to more than just embarrassment. The direct and indirect costs add up:

• Bank fees: Both the issuer and the recipient may be hit with dishonour fees.

• Late payment penalties: If the cheque was for a bill or rent, additional late fees may apply.

• Credit impact: While a single bounced cheque usually won’t affect your credit score, repeated incidents can harm your financial reputation with banks and businesses.

• Legal action: In rare cases, knowingly issuing a cheque that will bounce could lead to prosecution under the Cheques Act 1986.

Protect yourself with these practical tips:

• Always check your account balance before writing a cheque.

• Use digital payment methods when possible—they’re faster, safer, and less prone to errors.

• If you receive cheques, deposit them promptly and keep digital records in case of disputes.

• For businesses, set clear payment terms and communicate bounce fee policies upfront to customers.

Consider the case of a Sydney tradie who accepted a $2,000 cheque for work completed. When the cheque bounced, not only did he lose the payment, but he also faced a $40 dishonour fee from his bank. By switching to digital invoicing and upfront deposits, he’s avoided similar headaches since.

The Future of Cheques: Are We Nearing the End?

With Australia’s major banks planning to phase out cheques entirely by 2030, many are encouraging customers to transition now. The Reserve Bank of Australia has signalled that cheque processing will become slower and more expensive in the coming years. For those still relying on cheques—especially in regional areas or for legal transactions—it’s time to explore alternatives like PayID, BPAY, or secure electronic transfers.