California Check Fraud Law
California Civil Code 1719, commonly known as the "California bad check law," addresses check fraud in the state. The law protects persons or businesses receiving checks for payment that are returned by a bank for insufficient funds.
Other People Are Reading
-
Features
-
The California bad check law requires the writer of the bad check to pay the recipient the face amount of the check plus a statutory (mandated) service fee. If the amount is not paid in full and the recipient mails a written demand for payment, the check writer must pay the amount of the check, a service fee and the recipient's mailing costs. If the check writer does not make the total payment due within 30 days of receipt of the demand for payment, he must pay the amount of the check and a statutory penalty of three times the amount of the check.
Limits
-
Some limits apply to the bad check law. For example, recipients of bad checks cannot receive both a service charge and a penalty; only one penalty per returned check is allowed and service fees are capped at $25 for the first returned check and $35 for subsequent returned checks. Statutory penalties must be at least $100 but not more than $1,500.
-
Exceptions
-
Writers of returned checks are not liable for service charges in certain situations. These include instances whereby a bank error or a posting delay of a regularly scheduled direct deposit, such as a paycheck or government assistance check, caused an occurrence of insufficient funds.
-
References
- Photo Credit check in macro image by Alexey Klementiev from Fotolia.com
