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Bad Check Laws

SUMMARY OF STATE BAD CHECK LAWS as of December 1999 Copyright © 1999 Commercial Collection Agency Association Commercial Law League of America This publication contains a Table of Bad Check Laws that summarize various state laws concerning the issuance of bad checks. In addition, the Table provides information on service charges and civil penalties that the holder of a bad check or the courts may impose on the check’s issuer. Legal proceedings may be necessary to collect service charges, and are necessary to collect civil penalties. The Summary is intended only as a general guide and in the main addresses checks presented in payment of business or commercial transactions. When a check is taken in connection with a consumer transaction, it is generally a violation of the Fair Debt Collection Practices Act to threaten criminal action without the intent or ability to do so. The Commercial Law League of America (CLLA) or the Commercial Collection Agency Association of the CLLA does not make any representation as to the accuracy of the contents of this publication. Any person with a bad check problem should consult legal counsel for full details on the law of a particular state. While there are differences among the states as to how bad checks are viewed (whether a misdemeanor or a felony) and the remedies available to holders of the bad check against the drawer, there are several general factors that run through the majority of state laws: In all states the maker of a check, who tenders a check knowing there is insufficient funds or credit behind the check, may be guilty of a crime and may be subject to civil penalties. In the majority of states the crime is treated as a misdemeanor. In states that make a distinction regarding a felony or misdemeanor, the amount of the check usually determines if the chine is a misdemeanor or a felony. In several states the law provides for fines and or imprisonment, but does not specific if the crime is misdemeanor or felony. In some states there is a criminal offense only when the bad check is given in exchange for property or for a present consideration. In other states it is a criminal offense to issue a bad check with intent to defraud or with knowledge of insufficient funds. The intent to defraud and knowledge of insufficient funds is required to be present by most states’ bad check laws. The intent to defraud is sufficient. It is not necessary for the payee to have actually been defrauded In most states statutory provisions provide that it is prima facie evidence of insufficient funds (or of intent to defraud) if: (a) the check was not paid by the drawee (bank) on presentation for payment and (b) the drawer did not pay the cheek within a specified number of days after written notice to the drawer of dishonor of the check. The prescribed numbers of days for the various states are: State Days   State Days   State Days   State Days Alabama 10   Illinois 30   Montana 10   Rhode Island 10 Alaska 15   Indiana 30   Nebraska 10   So. Carolina 10 Arizona 12   Iowa 30   Nevada 30   So. Dakota 30 Arkansas 15   Kansas 14   New Hampshire 10   Tennessee 10 California 30   Kentucky 10   New Jersey 35   Texas 10 Colorado 15   Louisiana 15   New Mexico 10   Utah 15 Connecticut 30   Maine 10   New York 30   Vermont 30 Delaware 30   Maryland 10   No. Carolina 30   Virginia 30 D. C. 5   Massachusetts 30   No. Dakota 10   Washington 15 Florida 30   Michigan 7   Ohio 30   West Virginia 10 Georgia 10   Minnesota 30   Oklahoma 5   Wisconsin 30 Hawaii 10   Mississippi 15   Oregon 30   Wyoming 30 Idaho 10   Missouri 30   Pennsylvania 10       In many states the criminal provisions regarding bad checks do not apply to post-dated checks. Because post-dated checks are a promise to pay in the future, they are not technically viewed as checks. It has generally been held that post-dated checks are not within the scope of most states’ bad check laws. It is generally held that the giving of a bad check in payment of a preexisting debt does not fall within the purview of most states’ bad check laws. Since the debt is preexisting the maker of the check did not deprive the payee of any right procure anything of value from the payee or wrongfully appropriate anything belonging to the payee. On paper, the legal consequences for the maker of a bad check are usually quite severe, however, as a practical matter the holder of a bad check may find it difficult to put into effect available remedies. In most localities it is necessary to file a complaint with the appropriate criminal justice officer such as a sheriff or district attorney to initiate criminal legal action. In the main most of these criminal justice officers are just too busy with other more serious crimes against the community. Therefore, the filing of a bad check criminal action will usually not be promptly acted upon, except in cases involving significant amounts of money. However, as a credit grantor you can effectively deal with the majority of routine bad check situations encountered by putting into practice the following procedures: Instruct your bank to re deposit any cheeks returned for insufficient or uncollected funds. This procedure will effectively address any clerical errors the check’s maker may have made regarding their bank account balance, On cheeks still unpaid after re depositing or returned because payment was stopped, you should write to the maker advising them of the non-payment, provide details of the cheek and request in addition to the amount of the check any appropriate service charges. It is suggested that the letter be sent certified mail with a return receipt requested. However, on small balance bad checks the letter may be sent regular mail. If the maker of a bad check does not respond to your notice and fails to make the cheek good you should contact a member of the Commercial Collection Agency Association of the CLLA to discuss the situation with them. They will be able to offer you assistance with the collection of the bad check and put you in touch with legal counsel if you desire to discuss legal remedies that may be available to you. STATES FELONY MISDEMEANOR SERVICE FEES CIVAL PENALTIES Alabama -- All Amounts The greater, either $26 or actual charge by bank for returned check None Alaska >$500. <$500. $25. $100. or triple the amount of the check, whichever is greater, except maximum is $1,000. Arizona >$25. <$25. $25. or actual bank charge for returned check Twice the amount of the check of $50., whichever is greater plus costs and reasonable attorney’s fees awarded by the court Arkansas >$200. <$200. $20 Twice the amount of the check, but in no case less than $50. plus interest, court costs and reasonable attorney’s fee. California All Amounts (1) $25. $100. or, if higher, three times the amount of the check up to $500. Colorado >$200. <$200 $20. $100. or, if higher three times the amount of the check plus court costs and reasonable attorney’s fees awarded by the court Connecticut >$1000. <$1000. --* For an NSF check: determined by the court but in no event shall the amount be greater than the amount of the check or $400., whichever is less. For a check drawn on a non existent account: determined by the court but in no event shall the amount be greater than the amount of the check or $750. Delaware >$300. <$300. --* $100. or three times the amount of the check not to exceed $500. District of Columbia >$100. <$100. --* None Florida >$50. <$50. $20. or 5% of check face value. Minimum of $50, in addition ot the amount of the check or three times the amount owing, plus court costs and reasonable attorney fees. Georgia >$500. <$500. $25. or 5% of check face value, whichever is greater. Double the amount of the check not to exceed $500., plus any court costs incurred. Hawaii -- All amounts --* $100 or triple the amount of the check, whichever is greater, not to exceed $500. Idaho -- All amounts $20., provided prior notice given at point of sale $100 or triple the amount of the check, whichever is greater, not to exceed $500. Illinois (2) All amounts $25. or all costs and expenses, including reasonable attorney’s fees necessary to collect the check. $100 or triple the amount of the check whichever is greater,  not to exceed $1,500, plus attorney’s fees and court costs. Indiana All Amounts -- $20. Triple the face amount of the check, not to exceed $500. In addition: interest, court costs, reasonable attorney’s fees and other miscellaneous expenses. Iowa >$20. <$20. $20. Triple the face amount of the check, not to exceed $500. Kansas >$50. <$50. $30. $100, or three times the amount of the check, not to exceed $500. Kentucky >$100. <$100. --* None Louisiana >$100. <$100. $25. or 5% of check amount. Minimum of $100, or twice the amount of the check plus attorney’s fees and court costs. Maine All Amounts -- --* Amount of check, plus court costs, service costs, collection costs and processing charges incurred by the holder. Maryland >$300. (3) <$300. (3) $25. maximum Collection fee of up to $25., plus an amount up to double the amount of the check, but not more than $1,000. Massachusetts >$100. <$100. $20. Minimum of $100. nor more than $500., as determined by the court. Michigan -- <$50 $25. Diouble the amount of the check, with a minimum of $50. and maximum of %500. If check is over $500. the maker is responsible only for the amount of the check. Minnesota -- All Amounts $20 Up to $100. or up to 100% of the value of the check, whichever is greater. Interest at the rate payable on judgments and reasonable attorney’s fees. Mississippi >$100. <$100. $30. Varies by the face amount of check: Up to $25.—100% of the check amount; from $25. to $200.—50% of the amount of the check and over $200.—25% of the check amount. Missouri >$150. <$150. --* Triple the amount of the check or $100., whichever is greater. Montana >$300. <$300. $30. The greater of $100. or three times the amount of the check, however, damages may not exceed the amount of the check by more than $500. Nebraska >$300.(3) <$300. (3) --* $10. plus any reasonable handling fee imposed upon the holder by the bank. Nevada <$100. <$100. --* Three times the amount of the check, but not less than $100. nor more than $500. New Hampshire >$500. <$500. --* Court costs, service costs, and collection costs. If judgment obtained and not paid on judgment date, $10. per business day up to $500., plus reasonable attorney’s fees. New Jersey >$200 <$200 --* $100., or triple the amount of checks to $500., maximum. New Mexico >$25. <$25. --* $100. or triple the amount up to a limit of $500. New York -- All Amounts $20., or a lesser amount contracted for. If reason for bad check is no existing bank account damages can be twice the face amount of the check or $750., whichever is less. If reason for bad check is NSF, damages can be twice amount of check or $400., whichever is less. Notice must be posted at point of sale. North Carolina -- All Amounts $20. Triple the amount of the check, with a minimum of $100. and maximum of $500. North Dakota All Amounts All Amounts $20. The lesser of $100. or three times the amount of the check. Ohio >$150. <$150. --* None Oklahoma >$20. <$20. --* None Oregon >$75. <$75. $25. $100. or triple the amount of the check not to exceed $500. Pennsylvania -- $200. $20., provided that prior written notice is given at the time check is issues. $100. or triple the amount of the check not to exceed $500. Rhode Island >$100. <$1000. --* A collection fee of $25. and an amount equal to three times the amount of the check, but in no case less than $200. but no more than $1000. South Carolina -- All Amounts $25. Triple the amount of the check or $500., whichever is less. South Dakota <$500. <$500. $30. All reasonable costs and expenses of collection. Tennessee <$100 <$100 $20. Triple the face amount of the check, not to exceed $500. In addition, interest at the rate of 10% per annum; service charges; court costs and reasonable attorney’s fee. Texas $50. <$50. $25. None. Utah >$300. <$300. $20. Interest and all costs of collection, including all court costs, reasonable attorney’s fees and reasonable compensation to the check’s holder if collection is pursued personally by the holder. Vermont -- All Amounts --* Court cost, cost of service, bank fees, interest, attorney’s fees and damages in the amount of $50. Virginia <$200. <$200. --* Legal interest from the date of check, bank fees, and a processing charge of $20. In addition, the lesser of $250. or three times the amount of the check. Washington <$250. <250. $40. (4) Reasonable attorney’s fees and three times the amount of the check or $300., whichever is less. West Virginia >$200. (3) <$200. $15. None Wisconsin -- All Amounts All reasonable expenses necessary to collect worthless check. Three times the amount of the check, and all actual costs of legal action, including attorney’s fees. The total amount of the foregoing damages cannot exceed  $500. Wyoming >$200. <$200. $30. Thrice the amount of the check, but in no case less than $100, plus costs of collection including reasonable attorney’s fees. *         Our research fails to reveal a service charge designated by state statute. We suggest you explore with legal counsel charging a reasonable fee of $15. to $20. (1)   An offense may be deemed a misdemeanor at the discretion of the court (2)   The offense is considered a felony, if it represents subsequent offenses over $150. (3)   Both misdemeanors and felonies are concerned with the acquisition of property. (4)   A reasonable fee not to exceed $40., or face amount of check whichever is less and interest at 12% per annum provided check does not provided for payment of interest, collection or attorney’s fees.

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