If Your Check Bounces
Authored By: Northwest Justice Project
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What you can do if you receive an insufficient funds notice from your bank. #0900EN.
- What is a bounced check?
- How does a check bounce?
- How do I find out I bounced a check?
- What happens next?
- They sued me. Can I still settle?
- What if the collection agency does not follow the law?
- How can someone collect a debt from me?
- How else does the law protect me?
A "bounced" or dishonored check is one you write but cannot pay for, usually because there is not enough in your bank account to cover it. Writing bad checks is a crime in Washington. RCW 9A.56.060.
State law has procedures you and the party trying to collect on your check must follow when your check bounces.
You give a merchant a check to pay for something. The merchant sends your check to the bank to collect the money.
If there is not enough in your account to cover the check, the bank will dishonor (not pay) the merchant for your check. Your check has "bounced."
Your bank returns the check to the merchant. The bank or a collection agency sends you a "Notice of Dishonor." (RCW 62A.3-503.) It says you now owe the merchant the check amount AND a returned check fee.
The bank is no longer involved. The law says how the merchant/debt collection agency must try to collect from you:
Up to thirty-two days after sending the Notice of Dishonor, you can settle by paying them the check amount, a handling fee, a 12% annual interest fee built up since they sent the Notice, and the lesser of the check amount OR $40. RCW 62A.3-515(1).
Thirty-three days after sending the Notice of Dishonor, if you have not settled the matter, they can sue you. A court could find you responsible for the check amount, any court costs, service costs, attorney fees, collection costs, interest, and the lesser of three times the check amount OR $300. RCW 62A.3-530(1).
Maybe, before trial. If you can afford it, offer to pay court costs, service costs, reasonable handling fees, attorneys' fees, interest, and the check amount OR $40 (whichever is less). They must take your payment as full satisfaction and dismiss the case. RCW 62A.3-515(1).
They are breaking the law if they demand
Higher interest or collection fees than described above.
Any interest, collection fees, or attorney fees sooner than fifteen days after sending you the Notice of Dishonor.
Attorney fees higher than those set by the court.
You will then owe only the check amount and a reasonable handling fee. RCW 62A.3-525.
Contact you after getting notice that you have a lawyer.
While trying to find you, tell people you know that they are with a debt collection agency (unless specifically asked) or that you owe a debt. They must identify themselves and say only that they are trying to find you.
Talk about the case to anyone not directly connected with it. They cannot tell your employer/relatives/friends you owe a debt. They can talk to your spouse or parents (if you are a minor).
Contact you again, after you wrote them that you would not pay the debt or want them to stop contacting you. They may contact you to say they will no longer try to collect, there are things they can now do to solve the problem, or they are taking specific actions against you to collect the debt (example: suing you).
Threaten you with arrest for not paying.
Call you at work if they know it is inconvenient.
Under federal and state law (RCW 19.16.250), a debt collector cannot:
Claim to be someone s/he is not – like law enforcement, a government representative, or a lawyer.
Threaten to do things s/he cannot – like taking your house, or threatening to hurt your credit rating.
Under Washington law, a debt collector may not call you:
Before 7:30 a.m. or after 9 p.m.
At home more than three times a week.
At work more than once a week.
You may have a claim against a debt collector who breaks any of these rules.
This publication provides general information concerning your rights and responsibilities. It is not intended as a substitute for specific legal advice.
This information is current as of June 2017.
© 2017 Northwest Justice Project. 1-888-201-1014
(Permission for copying and distribution granted to the Alliance for Equal Justice and individuals for non-commercial use only.)