Bad Check Program Information
Preventing Losses Due to Bad Checks
- Verify the identity of the check writer.
- require photographic identification verifying that they are the account holder, such as a driver’s license, passport or ID.
- compare the photo with the person presenting the check to see if they match.
- compare the signatures to see if they match.
- Require the person presenting the check to sign it in the cashier’s presence. If the check is already signed, you should still require the person presenting the check to sign it again below the first signature.
- Make sure the check contains adequate identifying information.
- document the driver’s license number and state of issuance
- document date of birth
- document phone number
- document any changes to a pre-printed address or phone number
- After all of the security procedures are completed, the clerk should initial the check. This will serve as the clerk’s assertion that they have followed the procedure and assist in identifying witnesses if the matter has to go to court.
Some additional tips to reduce your losses are:
- Do not take checks from people outside your city, or at least outside Hancock County. (Out of area checks decrease the likelihood of a successful prosecution because the defendant generally cannot be easily identified or located.)
- Don’t take a check for more than the amount of the purchase.
- Prohibit cash refunds until the check has cleared the bank. (It is common for a check writer to purchase an item and then to want to return it for cash.)
- Do not cash checks.
- Do not accept two party checks.
- If you are suspicious, don’t be afraid to stall. A check writer will often present the check when you are very busy. He may be very demanding and try to intimidate you in to trying to rush the purchase and side-step your security procedures.
- If your losses tend to be substantial, consider check verification services and/or not accepting checks.
These policy suggestions cannot be implemented by the courts, the police or me -- they can only be implemented by you. Whether a bad check writer is knocked out of action depends on you.
Role of Police/Sheriff and the Hancock County Attorney's Office
If you are concerned solely with collecting on the checks, you should not submit your bad checks for prosecution. There are a number of collection agencies that are available for that purpose. You may contact your local chamber of commerce for more information.
Applicable Law for Prosecution of Bad Checks
A person commits theft when the person does any of the following:
Makes, utters, draws, delivers or gives any check, draft, or written order on any bank, person or corporation, and obtains property or service in exchange therefore, if the person knows that such check, draft or written order will not be paid when presented.
This requires the State to prove many things:
- The defendant is the person who presented the check.
- The defendant received goods or services in exchange for the check.
- The defendant knew the check wouldn’t be paid when presented.
In order to prove the first two elements, there must be a witness who can look at the defendant and say “That is the person who gave me the check” and a witness who can say that the person received something in exchange for the check.
Proving the third element (knowledge) can be very difficult unless the person has been served with a ten-day notice or the account has been closed. Without the service of a ten-day notice, prosecution will not usually be unsuccessful. However, if the check was written on a closed account, a ten-day notice is not necessary.
The penalty for bad checks is the same as any other theft and this is determined by the amount of the check itself. The law allows us to consolidate checks written to different stores by the same person. This will usually increase the penalty. The degrees of theft and their respective penalties are as follows:
FIRST DEGREE THEFT - Theft of property exceeding $10,000 in value.
SECOND DEGREE THEFT - Theft of a motor vehicle worth less than $10,000 or theft of other property exceeding $1,500 in value but not exceeding $10,000 in value.
THIRD DEGREE THEFT - Third offense theft of less than $750 or theft of property exceeding $750 but not exceeding $1,500 in value.
FOURTH DEGREE THEFT - Theft of property exceeding $300 in value but not exceeding $750 in value.
FIFTH DEGREE THEFT - Theft of property not exceeding $300 in value.
If the check was for less than $300 and written more than one year ago, it cannot be prosecuted.
Please also note that the circumstances under which the check is written or your actions after a check is written may prevent criminal prosecution even if you are never paid on the check. In the following situations, a criminal offense has not occurred – even if you are never paid – and it is a civil matter which must be pursued by you on your own without the assistance of law enforcement or my office. Mediation services still could be utilized.
- If you know the check isn’t good when it’s given to you (i.e. if you accept a post-dated check or the check-writer tells you it will not be good until a later date), it is a civil matter.
- If you agree with the check writer to give them time to pay a bad check, you have made a civil contract with the person and if they do not follow through, it is a civil matter.
- If the check is for payment on an account or on an extension of credit, it is a civil matter.
- If the check is for something other than in exchange for property or services, such as reimbursement, security deposits, etc., it is a civil matter.
Procedure for Initiating Criminal Prosecution in Hancock County
- The merchant must send a ten-day notice by certified letter, return receipt requested, to the check writer. (A sample form is included in this packet.) However, if it was an account closed check, a ten-day notice need not be sent and the merchant may skip Step 1.
- If the 10-day notice is not complied with, the merchant must provide the following information to the designated person at their local law enforcement agency:
a. the ORIGINAL check;
b. copy of the ten-day notice and either the proof of receipt OR the original returned letter;
c. a completed Bad Check Complaint Information Form (a sample form is included in this packet);
d. an itemization of out-of-pocket expenses;
e. any response received regarding the ten-day notice.
- IN ALL JURISDICTIONS EXCEPT FOREST CITY POLICE DEPARTMENT, the officer will send a letter to the check writer, permitting 14 days for the check writer to make payment to the merchant. If the check writer pays the merchant in FULL (including the returned check fee), the merchant must provide to the check writer a written receipt showing the date of payment and the amount of payment and signed by the appropriate agent of the merchant. The check writer must then bring proof of payment to the law enforcement agency. It would also be helpful for the merchant to advise the officer that payment was received.
- If payment is not made, the officer will file a criminal complaint, and the matter will be transferred to my office.
- A Magistrate’s citation will be issued requiring the defendant to appear at an Initial Appearance hearing or in rare instances, an arrest warrant may be issued. From this point, there are three possible outcomes.
WITHIN THE JURISDICTION OF THE FOREST CITY POLICE DEPARTMENT, the officer will send a letter to the check writer, permitting 14 days for the check writer to bring to the police department a money order payable to the merchant, including the returned check fee.
a. The defendant may not appear at the hearing. If this occurs, a warrant will issue for the defendant’s arrest. This may delay the prosecution for a lengthy time. It is possible that the defendant will never be found and brought before the Court. Without a social security number and date of birth a warrant cannot be issued. If your clerk did not write down the information, our office will not be able to continue prosecution.
b. The defendant may appear at the hearing and plead guilty. If this occurs, the Magistrate will enter an order convicting the defendant of theft, and ordering the defendant to make restitution to the merchant.
c. The defendant may appear at the hearing and plead not guilty. If this occurs, the matter will be set for trial. Our office will notify you of the time and date, and it will be necessary for the merchant (and all other witnesses) to appear and testify at the trial.
Issue Regarding Restitution
First, having restitution ordered does not necessarily mean the merchant will ever be paid. The Magistrate will enter an Order for the defendant to pay. If the defendant has not paid the total amount ordered, it will be sent by the Clerk of Court to the state’s collection agency CCU. They will make efforts to collect any money due, which may not be sufficient for you to recover your loss.
Secondly, Iowa law permits restitution ONLY for “out-of pocket costs and expenses.” This is limited to items such as postage, copies, bank fees and certified letter costs. The returned check service fee charged by many merchants CANNOT be ordered by the Magistrate as part of restitution. Neither is there any restitution for time spent trying to collect on the check. It is necessary to itemize the costs and expenses to verify to the Magistrate that you made expenditures. Therefore, it is very important to keep an accurate list of expenses. (A sample form is included in this packet.)