I tried searching for this to no avail, so if this has been discussed before, feel free to point me to an existing thread.
I see lots of businesses that have the ubiquitous “$XX charge for returned checks.”
So how are those NSF check fees collected? And who actually gets the money?
I routinely take checks from people who buy my stuff at art/craft shows. I never ask for ID or write down a driver’s license number, because I don’t know what I’d do with the info if I had it. And I haven’t been burned so far.
But if I wanted to institute some charge for NSF checks, how would I do that? Is that an arrangement I would make through the bank that receives my deposits?
Here, in Jefferson Parish, LA, the district attorney handles bad checks. You provide the DA with the returned check and any information you have (usually written on the check), which is why you should always get a street address (not a P.O. Box), home and work phone and driver’s license number. The address and phone numbers allow you to try to reach the person to resolve it yourself, and if you have to bring it to the DA, it helps them too, plus they can put an attachment on the driver’s license.
Here, the charge is $25.00 for a bad check. If I call the customer and they immediately are apologetic and come right in to pay me in cash, I’ll just tell them to add the $4.00 the bank charged me.
If I can’t reach the deadbeat, I have to send a registered letter requesting payment within 10 days. If the registered letter comes back after 3 attempts to deliver, or if 10 days pass after the letter is signed for, I can bring it to the DA and they’ll go after the guy.
In the two cases I brought a bad check to the DA, they had a cashier’s check for me within a week and it’s always the amount of the bad check plus $25.00. Apparently, they go after the person pretty quickly.
I don’t know if they make the writer pay any additional fine.
One more thing…the DA won’t handle it if you put the check through a second time. You have to attempt to collect certified funds after it bounces the first time.
This is how it works here…YMMV.
Jurisdictions vary on this issue. Sometimes the local prosecutor has a restitution program and assesses a fee. Welcome to Clark County, NV
Most jurisdictions permit a merchant or a collection agency may be permitted to assess such a fee. See, http://lists.unc.edu/read/attachment/4587315/2/Returned.pdf
http://www.ca8.uscourts.gov/opndir/01/04/002661P.pdf