GENERAL RULES ON BOUNCED CHECKS (LONG)
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Posted by celce
(64.12.96.205) on July 22, 2002 at 23:03:42:
I posted this on another site and as a favor to WhyChat who works tirelessly here answering countless questions day after dat without renumeration...this one's for you! BOUNCED CHECK LAWS IN GENERAL
***state statutes differ but not remarkably so*** 1. A check written at the time of purchase of a good or service that is timely dated and given in lieu of cash if bounced is fraudelent and can be criminally prosecuted. 2. A check written to pay for goods or services received in the past bounces it is not criminally liable but can be civilly liable. 3. Post dated checks given under any circumstances are considered IOUs and are never criminally liable. 4. Third party checks depend on who knew what i.e. if A gives B a check and B endorses it to C knowing it is fraudelent then B would be criminally liable. If A gives B a check and B relies on it and endorses it to C then A is criminally liable. As you can tell by this scenario this can be somewhat difficult to prove so the best advice is never to deal in third party transactions. 5. Fraudelent intent is when one knowingly writes a worthless check. Intent has to be proved but after being noticed the check payor does not make a timely effort to cure the check payee then that could be considered adequate proof and the payor could be criminally liable. 6. Checks that are written on closed accounts. This is where state statutes can differ. As we all know there are many reasons for a bank to close an account without notice. If one had no knowledge that their account was closed at the time of presentation then there is no criminal liability. But if the merchant notices you and you do not make an effort to "cure" in a timely fashion then you could be held criminally liable. 7. Stop Pay checks. This should only be used if you have a valid complaint and have noticed the merchant in an attempt to "cure" the deficiency or you have returned the goods purchased with the check. Never ever arbitrarily stop payment on a check without grounds or you could be held criminally liable. I have posted this because I have read alot of misinformation on this subject matter in all the forums.
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