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You Deposited a Check, and it Bounced; Now What?

You can recover the amount of a bad check—and perhaps a whole lot more—by following these steps.

Have you ever seen those signs at a major store that say there will be a $25 or $50 service fee for a bad check? While intimidating, the law actually gives you the right to seek substantially more than a mere $25. If you have to seek the assistance of the court for a bounced check payable to you or your company.

Every day, small businesses and individuals are faced with the problem of dishonored checks, either because the check was dishonored for insufficient funds, or worse, because the writer of the check called his or her bank and stopped the payment.

A bounced or canceled check can be really damaging and, frankly, offensive. As the recipient of a bounced check, you are faced with several options. Unfortunately, most people and businesses simply do nothing. In some circumstances, a bounced or canceled check can be a criminal offense. I am not a criminal attorney, and therefore, I choose not to dive into that course of action.

If you choose to seek justice for a bounced check or a canceled check in the civil (non-criminal) court, then this article is for you.

Section 68.065, Florida Statutes, provides a very well-written statutory process to collect for a dishonored or canceled check. If the matter must go to court and you prevail, you are entitled to:

  1. The amount of the check
  2. Treble (triple) damages of the check
  3. Court costs
  4. Interest
  5. Bank fees
  6. Attorney’s fees. 

Let's say someone bounced a $100 check, and you had to get a judgment. If you prevail, you would be entitled to $100 for the amount of the check, $300 for the treble damages, $175 for court costs, plus service of process (assume $60), interest, at 6 percent for 2011, service fees of $30, and attorney's fees of $1,000.00 to represent you (depending on what is reasonable and what you agreed upon). The issuer of the bad check now has a judgment against him or her for approximately $1,695 for a $100 check. 

That, under any definition, is a severe penalty to the check-writer. 

How to collect on a bad check
In short, here is the process for collecting on a bad check that includes both a bit of common sense and the statutory requirements. This applies whether you received a check as a business or private consumer or from a business or private consumer.

  1. If you have a good relationship with the person or business that wrote the check, call or email them first and allow them a chance to cure the problem. They will probably feel very embarrassed and try to correct the problem immediately. However, ask for certified funds or cash and issue a receipt. 
  2. If you decide to start the formal procedure, you must send a demand letter using the specific language in section 68.065, Florida Statutes, that is provided below*. You must send the demand via certified or return mail. You must also include the check number, the amount, and the bank that the check was to be drawn upon. In other words, make a copy of every single check you receive and keep the copy in a file.
  3. You must give the person 30 days to pay the check amount plus the service charges before you can start a lawsuit as part of your demand.
  4. If the letter does not work, you can then file the lawsuit seeking a lot more than the actual check amount. The Florida Supreme Court has already written a basic form you can fill out, available in the Florida Rules of Civil Procedure Form 1.942, which can also be found here. Do not forget the summons, which is in the same set of forms. 

Note that you do not necessarily have to hire an attorney to bring this type of action for you. However, the statute does provide for your attorney to be paid for his or her services by the defendant if you prevail. From a common sense perspective, if the writer of the check has assets, hire an attorney.  If it is from, for example, a tenant who has absolutely no money, consider filing the case on your own. 

If you file a lawsuit, but the writer of the bad check decides to pay the damages before a final hearing, he or she can only settle the case by paying you the amount of the check, the service fees, the court costs for filing, and your attorney's fees unless you agree otherwise. 

Now that you know the basics of the law, my recommendation is to cut and paste the following language onto your letterhead and have it prepared for certified mailing for when a client bounces a check:

* “You are hereby notified that a check numbered _______   in the face amount of $ _______ issued by you on (date), drawn upon (name of bank), and payable to  __________, has been dishonored. Pursuant to Florida law, you have 30 days from receipt of this notice to tender payment in cash of the full amount of the check plus a service charge of $25, if the face value does not exceed $50, $30, if the face value exceeds $50 but does not exceed $300, $40, if the face value exceeds $300, or 5 percent of the face amount of the check, whichever is greater, the total amount due being $__________  and ________ cents. Unless this amount is paid in full within the 30-day period, the holder of the check or instrument may file a civil action against you for three times the amount of the check, but in no case less than $50, in addition to the payment of the check plus any court costs, reasonable attorney fees, and any bank fees incurred by the payee in taking the action.”

The bad check statute is not very well known to the business community. However, it should increase receivables for those people who had no intention of paying you in the first place. By placing the letter in a standard everyday business form, you should be able to send the letter with little expense and time spent, and the returns should be very beneficial. Of course, if you really have to seek court assistance, the check writer is looking at significant damages for wronging you. 

There is, of course, another side to the coin: Don’t write bad checks, because now you know what you are facing.

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