Some bad checks are a mistake, others are intentional. Basically, an unintentional error is considered a civil matter, and an intentional bad check issuance is considered a criminal offense. In either case, the person who issued the check is legally required to make good on the check, or face civil and/or criminal penalties.
Bad checks in Maine are very recoverable but it is important to know your rights and responsibility.
A bad check can be either a check issued that is returned for insufficient funds or a check written on a closed account.
Maine law is very specific about the process to recover a bad check. You must send a letter to the issuer using this specific language from Maine statute:
Your check, draft or order made payable to _____in the amount of _____ has not been accepted for payment by _____which is the drawee bank designated on your check. The check is dated _____and it is numbered ________.
You are CAUTIONED that unless you pay the amount of this check within l0 days after the date this letter is postmarked, you may have to pay the following additional costs:
- Attorney’s fees;
- Service costs;
- Processing charges;
- Interest; and
- A penalty not to exceed $150.
You are advised to make payment to the address on this letter. Payment must be for the full amount of the check and must be in cash or certified funds.
This language is mandatory. As you can see, if the checkis not paid after 10 days, you are entitled to various fees and costs. If you are not paid within the 10-day period, you can contact the authorities. Your local police department is a good place to start, although come cities and towns will refer the matter to the country sheriff. DO NOT be afraid to take this step. It does not necessarily mean that the person will be arrested. It may be just the incentive your customer needs to make good on the check.
Some other things to remember:
- Ask for repayment in certified funds.
- We recommend full payment only. If you take partial payment, you may void your ability to employ other civil and criminal penalties.
- If someone issues you a second bad check within a year, you may be entitled to additional funds, but you will have to go through a notification process again. However, we recommend you do not take a second check from someone who has bounced a check on you – certified funds only. Fool me once…
- If you do get the authorities involved, stay in close contact with them and notify them immediately if you get paid. This is very important, especially if the police would be pursuing criminal charges.
- Your customer contract should address bounced checks and let them know that you will pursue all lawful remedies available to you.
- Make sure you take contact information from anyone issuing you a check.
- If a check looks funny to you, ask the customer to wait while you call the bank to check.
- Do not take second or third party checks.
- If you decide to hire a collection agency to help you collect the check, provide them with copies of the bad check (both sides) and your correspondence.
There are check clearing services you can purchase, but they may be expensive. Your best bet is to have a clear and consistent policy for both accepting checks and for handling bad checks, and to make sure that you communicate it to your employees and your customers alike.