Limits

Many LETS schemes have come to grief because of people running up deficits without the apparent ability or willingness to repay them. The idea of different levels, where an accountant can set a warning or stop a cheque, and another level, where committee approval is needed so that a deficit becomes a formal loan, has also been suggested.

If detailed trading information is made accessible not only to the LETS accountant but also to members in the way implied by the original LETS design it might have the effects which were always claimed of the community keeping the trading in order, but while systems have not made this information visible, wildly fluctuating accounts have been a problem - the section on Management proposes expanding the information available to all members in the visible trading records to give a much better picture of what is happening.

Similarly, there are problems with members accruing excessive positive balances. While there are no economic benefits to hoarding money in a system that doesn't pay interest (indeed, in a demurrage system, they may even be charged interest on positive balances), it is in the interests of the system to encourage the currency to keep flowing.

• transactions will be blocked if they put the balance of the account over the limit for the currency or the system. Spends will be restricted according to actual balance while receipts will be restricted according to pending balances
• balances are checked for both parties at both the creation and confirmation of the transaction. If a transaction becomes illegal between creation and confirmation, it will appear as pending, but there will be no button to confirm it.
• ideally, currencies would also have hooks, at which something would happen, to be defined by the currency administrator.