Friday, November 1, 2013

Florida's Bad Check Laws

It happens to us all, we sell something on eBay, accept a check at a yard sale, etc. When the check is deposited, it bounces and suddenly there's a bounced check fee applied to our balance. Generally fraudsters are all over the place, and from what I hear some even print their own checks. Unreal, huh?

But what do you do about it? Call the cops? File suit? Well, if you can identify the person who issued the check (and 99% are not too bright about hiding their identity, you can file suit AND press charges. But you have to do it the right way.

Issue Notice

Depending on what how far you want to go with this the law provides a series of remedies for this particular activity. If you want to press charges, you first need to send the statutory fifteen-day notice to the evil-doer who sent you the bad check. You'll also need certain identifying information, or some way of letting the courts know that the person who gave you the check is the person you are asking the authorities to put in the electri... I mean, yell at.

At the same time, you'll want to issue a second thirty-day statutory notice for the lawsuit to recover the money. Really? I have to pay hundreds to recover the money I am already owed? Well, no. You could let the police handle it after fifteen days and write it off. But wait... consider the next section about what you can recover.

That fifteen day notice is a statutory requirement before the state attorney office in your area will even look at your paperwork. After all, in these tough economic times, if somebody messes up because their finances are off in the bank, half of the population would be on trial. So the law wants to give the offending check-issuer the opportunity to make good on the check which was dishonored.

What Can I Recover?

Here is where Florida law gets good. You can recover the following:
  • Attorney Fees - meaning you can pay an attorney to file suit on your behalf or find one that may go after the offending party on a contingency basis.
  • Court Costs - meaning that money to spent to file suit... you get it back.
  • Face Value - meaning what was owed already.
  • The Service Fee - meaning between $30 - 5% of the face value of the check, depending...
  • Bank Fees - meaning that pesky $35 the bank charged you because that other guy's check bounced.
  • Treble Damages - mean THREE TIMES the amount of the check's face value.

What Type of Instruments are Covered?

I know... I know, I say check all up there but what about other instruments? Well, Florida law punishes "the evil of giving checks, drafts, bills of exchange, debit card orders, and other orders on banks without first providing funds in or credit with the depositories on which the same are made or drawn to pay and satisfy the same". Yes it's really worded that way. I use the term check because it's easier, but you know, not everybody uses checks.

Also, it applies to the issuance of bad instruments even when nothing was purchased... such as a settlement agreement drawn up to end a lawsuit.

How About an Example?

So let's say I'm selling my overstock of Tiddy Bears (a terrible investment, btw). A customer comes in and signs a check for one of these bears and walks away. She's happy because she finally found something that alleviates common seat-belt injuries. I'm happy because she was realized that a thousand dollars for a velco bear with an uncomfortable sounding name is a steal. She's happy because she knows the check is worthless and plans on getting away from me by driving three streets down.

I deposit the check and it comes back "dishonored" (yeah, banks still say that). My bank also charges me a $35 fee of some lame variety. Now, hopping mad, I issue two notices. One is a 15-day notice warning of my intention to assist in prosecution, the other a 30-day warning the check writer of my intention to litigate the matter if she does not pay in short order.

16 days later I look up my local state attorney office and send them a set of evidence they require in order to prosecute. After they process my request the police are dispatched to shoo... deal with her. In the mean time, I'm still waiting for the 30-day notice to ripen. From this point onwards, I only have an obligation to cooperate with law enforcement for the criminal penalties.

But on day 31 I can sue the Tiddy Bear pilfering pirate for:
  • $35 lame fee;
  • $50 service fee;
  • $1000 face value;
  • $3000 treble damages;
  • The cost of the suit; and
  • My attorney fees... if I actually hired an attorney.
For a total of... a lot more than $1000.

But Surely Good Sir, There's No Such Thing as a Tiddy Bear.

Oh really? Click here.