Writing a check without insufficient funds may be a crime.
California Civil Code section 1719 allows the payee of a bad check to recover three times the amount of the check, up to $1500, if certain conditions are met. A cause of action under this law may be brought in small claims court, if the claim does not exceed $10,000, or in any other appropriate court.
If you have further questions regarding available civil remedies, feel free to contact us.
The California Statute of Limitations on NSF Checks
You are liable for the face value of the check for three years. The payee may bring an action against you in small claims court if the amount involved is less than $10,000. Your bank also has a three-year period to charge NSF fees for the bounced check. This three-year period runs concurrently with the statute of limitations related to the face value of the check.
If the payee chooses to recover payment by suing you, you may be held liable for three times the face value of the check. There is a minimum of $100 and a maximum of $1,500 on the statutory penalty that can be applied. This limit only applies to the penalty amount, not the value of the check. Your bank may not charge additional NSF fees if a statutory penalty is levied against you.
In addition to these financial penalties, you may also be subject to prison time for fraud under Statute 476(a) of the California Penal Code. The prosecutor must prove that you knew your bank balance was low at the time you wrote the check. If the face value of the check was under $450, you may be charged with a misdemeanor and spend up to 12 months in county jail. Checks over $450 carry felony charges and up to three years in jail.
You may be able to avoid statutory penalties by making restitution. The payee must send you notification of the bad check within 30 days of issuance. This notification must be sent via certified mail to start the 30 day restitution period. The payee must also declare his intention to file charges against you in small claims court if the check is not paid. You will then have 30 days to pay as much of your debt as possible. Partial payments reduce the face value of the check for future penalty calculations. You only will be released from liability when you have paid the full amount of the check plus any service charges or mailing costs.
Send certified mail.
Date:____________(write date here)
__________________ (write name of person that wrote the bad check here)
__________________ (write address of person that wrote the bad check here)
Dear ______________________: (write name of person that wrote the bad check here)
The check you wrote for $________, dated ______, which was made payable to _____________(write your/payee's name here), was returned by ______________ (write name of bank) because ____________(account was closed OR the account had insufficient funds).
Unless full payment of the check is received by cash within 30 days after the date this demand letter was mailed, together with $____________ in bank fees (write amount charged by your bank to process the bad check, not more than $25 for the first bad check or $35 per check for other bad checks), and $_____________, the cost of mailing this demand letter by certified mail, I will file a small claims court claim against you.
The claim will also request damages for the amount of the check, $____________, plus $___________ damages assessed at three times the amount of the check (calculated by starting with a minimum penalty of $100 up to a maximum penalty of $1,500, under California Civil Code 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:
__________________ (write your name here)
__________________ (write your address and phone number here)
__________________(sign your name here)
Downey, CA 90239