If you suspect a customer of check kiting.....and you place a hold, do you still have to give notice?

Yes, you could place an exception hold and use the notice for "reasonable cause to doubt collectibility." I believe ours has some language such as "we have confidential information that indicates the check may not be paid."

Anonymous #2 is correct, you can use the reasonably cause exception hold and you do have to provide the notice. Under reasons, you can use the statement "We have confidential information that indicates the check may not be paid" on the customer's notice. However, on the bank's copy of the notice (which you are required to retain), you must note the specific information that led to this hold, such as "we had evidence that the customer is kiting." Simply having the confidential information statement on the bank's copy of the notice is not enough.

Thanks to you both for your reply.

I for some reason am having trouble finding the reference, but don't you have to provide a CASE by CASE hold notice for a NON-EXCEPTION hold if you extend say beyond your general policy of next day? Does anyone have the reference for that section?

Never mind to the posting just above about the reference number.....I FOUND IT!!! Thanks anyway.