Information on Ohio's Consumer Laws from Attorney Daniel Myers, Myers Law, LLC, not legal advice
Almost everyone, at some point in time, encounters a bad check. Usually it is unintentional, other times it’s fraud. It is important to know what you need to do when you are the victim of a bad check in Ohio. Below is an explanation of your rights and duties when you are the victim of a bad check, and also some steps you can take to protect yourself.
In Ohio, it is illegal to write a check when the writer knows there are insufficient funds or when the writer knows he is going to stop payment. It is presumed that someone knowingly wrote a bad check when there is no actual checking account, or when the check is dishonored within thirty days of it being written. It is a form of criminal theft or fraud, and depending on the amount, can be a misdemeanor or even a felony! In addition to the criminal issues bad checks create, they also expose the writer of the check to serious civil liability and damages. Someone who knowingly writes a bad check for $4,000 could find themselves charged with a felony, and ordered by a civil court to pay more than $12,000, plus attorney fees and court costs.
Regardless of whether someone is prosecuted or found guilty, a civil lawsuit can be brought against the bad check writer.
But there is one important and often overlooked step that someone thinking about suing needs to take. Before a lawsuit is filed, the person who tried to cash the check must give written notice via certified mail at least 30 days before the lawsuit is brought. That notice has to have specific information–a lawyer should be used to write and help send this notice. If, within thirty days of being served with this notice, the bad check writer does not make good on the original amount, plus an additional nominal fee, or make some other agreement to pay, the wronged party can file a lawsuit seeking up to triple the amount owed, plus costs, plus attorney fees.
But beware: if you handle this wrong, or lose your case against the bad guy, you could be found liable for the bad check writer’s costs and attorney’s fees, adding insult to injury. This is why it is so critical to have your case evaluated by, and handled by, a knowledgeable attorney.
Tips to Protect Yourself:
Tip #1: When you cash a check, try not to immediately use the funds. While your bank might make the funds available to you immediately or the next day, the check must be sent to the person’s bank who wrote the check. That bank may dishonor the check even after your bank makes the funds available to you. Your bank will then come to you to claw back that money it paid. If you’ve spent it already, this can cause you a lot of problems and lead to a nasty surprise when you check your account balance.
Tip #2: If the check is dishonored, contact the other side to find out why–preferably in writing or via e-mail. It may have been a simple mistake by the writer of the check, so contact them to see if this is was unintentional or not. If they do not contact you back, or tell you they are not going to pay you, or give you another bad check, then this may not be a mistake. Getting the reasoning in writing is always the best option.
Tip #3: Keep the paperwork and dishonored check notice. It is critical to have a good paper trail when you are involved in one of these disputes. If the check was a payment for part of a written contract, keep the documents that support the fact that the contract exists and that you held up your end of the bargain.
Tip #4: Contact the police. This is one of those “civil matters” that the police sometimes investigate, handle, and solve because it involves either a misdemeanor or felony. Do not allow too much time to pass before you contact your own attorney, though, as the longer you wait, the more delayed your lawsuit will be. If you wait too long to contact an attorney and bring a lawsuit, you may lose the right to get your money back.
Tip #5: Don’t write bad checks. If you are paying a contractor to perform work for you, or someone else for their services or goods, do not write them a bad check. If you do not like the service, or the goods are defective, you are in a better position by simply delaying payment or not paying for them in the first place than you are if you write a bad check. Contact an attorney before this becomes a problem. Writing a bad check not only could lead to criminal and civil penalties, but you also lose your credibility and give up the moral high ground. Bottom line, don’t do it.