Any person who writes a check which is dishonored (bounced) for lack of funds or due to a closed account can be held liable for a penalty equal to three times the amount of the check, plus the face value of the check. The minimum penalty is $100 and the maximum penalty is $1500 (See California Civil Code section 1719).
The following conditions must be met in the case of a bad check:
- You must write a letter to the check writer and mail it by certified mail. Ask to be paid the amount of the bad check in cash or money order, within thirty days (See reverse for sample). Your demand may also include the fee charged by your financial institution to process the bad check, not to exceed $25 for the first bad check and $35 for each subsequent bad check processed and the cost of mailing the demand notice.
- You must wait 30 days. If you have not received payment in cash within 30 days from the date you mailed the demand letter, you may file a claim in Small Claims or the Civil Division. You may proceed with your suit even though the party has not signed for the letter, as long as you can submit proof of mailing by certified mail.
- At the hearing you must produce a copy of the demand letter sent to the check writer at his/her last known address and a signed certified mail receipt showing delivery or attempted delivery if it was refused.
- Take all other documents related to the case to the court hearing. These might include the notice from the bank, notes of your conversations and copies of any correspondence with the check writer regarding your effort to collect.
You do not need to prove that the check writer "knowingly" wrote a bad check. You must only prove the check writer failed to make good on the check after being notified.
(Sample: "BAD" CHECK DEMAND LETTER)
Send Certified mail, return receipt requested
Date:____________(insert date here)
__________________ (insert name of check writer here)
__________________ (insert address of check writer here)
Dear Check Writer:
The check you wrote for $________ , dated ______ , which was made payable to _____________ was returned by ______________ (insert name of bank) because (account was closed OR the account had insufficient funds).
Unless full payment of the check is received by money order or cash within 30 days of the date of mailing this demand, together with $____________(amount charged by your bank to process the bad check, not to exceed $25 for the first bad check or $35 for subsequent bad checks), and $_____________for the cost of mailing this demand letter by certified mail, I will file a Small Claims Court claim against you.
The claim will request damages for the amount of the check, $____________,plus $___________damages assessed at three times the amount of the check, (calculated by assessing a minimum penalty of $100 up to a maximum penalty of $1500, pursuant to Code of Civil Procedure section 1719), for a total claim of $__________against you.
You may wish to contact a lawyer to discuss your legal rights and responsibilities.
Please send your payment to:
__________________ (insert your name here)
__________________ (insert address here)
__________________ (your signature)