Slang term for someone who writes bad checks.
Paper hanging is a kind of check fraud whereby someone tenders a check knowing that there are insufficient funds in the account. In paper hanging, the paper hanger takes advantage of the “float” (that is, the amount of time between when the check is written and the funds actually move from the check writer’s account).
Paper hanging is distinct from another form of check fraud known as “check kiting,” whereby the check writer tenders a check knowing that there are insufficient funds in the account but deposits money into the account before the end of the float to cover the fraud.
In the United States, paper hanging is usually prosecuted under state law, but it is sometimes prosecuted as a federal offense (See 18 U.S. Code § 1344).
[Last updated in August of 2020 by the Wex Definitions Team]