Alex has not been keeping his banking records up to date. On his latest bank statement, he found that he had been charged an overdraft fee for writing a bad check. In addition to his being charged a fee, which of these is another possible consequence of an overdraft?
Answer
A
The merchant who received his check will be charged an overdraft fee.
B
The bank will cancel his debit card.
C
The bank will close the merchant's account.
D
The merchant who received his check will expect repayment and a penalty fee.
Explanation
When a check is returned for insufficient funds, the merchant who accepted it has not received payment. The merchant may ask Alex to repay the amount and also charge a penalty fee for the returned check. The bank’s overdraft fee is charged to Alex, not to the merchant, so choice A is correct.
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