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Bad Checks

Take Civil Action

Landlords, retailers, professional service providers, and other businesspersons have likely experienced a deposited check being returned for insufficient funds. This situation can be an expensive inconvenience that impacts your cash flow and business operations as you address this problem. Fortunately, Florida Statute 68.065 provides civil remedies to businesses and individuals for the recovery of these funds, plus service fees, treble damages, court costs, and attorneys’ fees.

Payment Instruments

Although this Statute is commonly referred to as the worthless check law, a “payment instrument” includes a check, draft, order of payment, debit card order, or electronic transfer of funds. If the remittance you received was in one of these formats, then you can seek remedies, as per the Statute.

Denial of Payment

Payment can be refused by the “drawee,” which is commonly a bank or other financial institution, for lack of funds, lack of credit, lack of an account of the maker, or if the drawer stops payment on the instrument. In situations of non-payment, the plaintiff must prove that this action was taken with the intent to defraud for the Statute to apply.

As a defense, the issuer may claim, for example, that payment was stopped for a valid reason. This could include the lack of receipt of goods and services that are claimed to have been delivered receipt of substandard goods or services, or rental property is damaged to the point that it cannot be used for its intended purpose.

In stop payment cases, the plaintiff must be prepared to show intent to defraud and to defend against any possible counterclaims. A judge or jury will determine if the plaintiff has proven intent to defraud on the part of the defendant.

Required Notice and Fees

Under the worthless check Statute, you are required to send the issuer of the payment instrument a notification by certified or registered mail before pursuing a lawsuit or other legal action. The notice must contain specific language. The issuer has 30 days from the receipt of the notice to pay the claim before further action can be taken.

In addition to the funds owed, the Statute also entitles you to a service fee. The amount of the fee varies by the sum that is owed. For checks under $50, the fee is $25. The service fee amount is $30 when the amount owed exceeds $50, but is less than $300. When the amount due is more than $300, the fee is $40 or an amount up to 5% of the face amount of the payment instrument, whichever is greater.

Non Compliance and Lawsuit

If the issuer of the dishonored payment instrument does not pay the claim within the required 30 day period, you may choose to file a lawsuit for the funds that are owed. If successful, you are entitled to receive the funds and the service fee that is due, as well as treble damages, court costs and attorneys’ fees.

In Closing

Unfortunately, dealing with a “worthless check” is all too common in business. If you have received notices of denied payment instruments, contact the attorneys at Lieser Skaff. Our skilled business attorneys have extensive experience in addressing these claims and can manage the process, from notification to trial, to achieve the best possible results.

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