Kiting Law and Legal Definition
Kiting is an illegal practice whereby a person profits from float, for example by depositing and drawing checks between accounts at two or more banks. In the past, clearing checks between banks took longer than it does today, and to take advantage of this delay individuals wrote "bad" checks to deposit funds before the checks were cashed.
It is a deceptive act involving the alteration or issuance of a check or draft with insufficient funds. It may also refer to the act of inflating the value of a financial instrument for financial benefits, such as the extension of a loan.