View Daily Data Tracking History
View Bill Text
View Statement of Purpose / Fiscal Impact
S1364................................................by JUDICIARY AND RULES
CHECKS - DISHONORED - Amends existing law relating to dishonored checks to
provide that written demand may be sent by regular mail supported by an
affidavit; and to revise provisions for the notice of dishonor.
02/04 Senate intro - 1st rdg - to printing
02/05 Rpt prt - to Jud
02/21 Rpt out - rec d/p - to 2nd rdg
02/22 2nd rdg - to 3rd rdg
02/27 3rd rdg - PASSED - 35-0-0
AYES -- Andreason, Boatright, Branch(Bartlett), Brandt, Bunderson,
Burtenshaw, Cameron, Darrington, Davis, Deide, Dunklin, Frasure,
Geddes, Goedde, Hawkins, Hill, Ingram, Ipsen, Keough, King-Barrutia,
Little, Lodge, Marley, Noh, Richardson, Risch, Sandy, Schroeder,
Sims, Sorensen, Stegner, Stennett, Thorne, Wheeler, Williams
NAYS -- None
Absent and excused -- None
Floor Sponsor - Stegner
Title apvd - to House
02/28 House intro - 1st rdg - to Jud
03/14 Rpt out - rec d/p - to 2nd rdg
Rls susp - PASSED - 64-1-5
AYES -- Barraclough, Barrett, Bedke, Bell, Bieter, Black, Block, Boe,
Bolz, Bradford, Bruneel, Callister, Campbell, Clark, Collins, Crow,
Cuddy, Denney, Ellis, Ellsworth, Eskridge, Field(13), Field(20),
Gagner, Gould, Hadley, Hammond, Harwood, Henbest, Higgins, Hornbeck,
Jaquet, Jones, Kendell, Kunz, Lake, Loertscher, Martinez, McKague,
Meyer, Montgomery, Mortensen, Moyle, Pearce, Pomeroy, Raybould,
Ridinger, Roberts, Robison, Sali, Schaefer, Sellman, Shepherd,
Smith(33), Smith(23), Smylie, Stevenson, Stone, Tilman, Trail,
Wheeler, Wood, Young, Mr. Speaker
NAYS -- Langford
Absent and excused -- Aikele, Deal, Kellogg, Mader, Pischner
Floor Sponsor - Boe
Title apvd - to Senate
03/14 To enrol
03/15 Rpt enrol - Pres signed - Sp signed
03/18 To Governor
03/26 Governor signed
Session Law Chapter 288
Effective: 07/01/02
|||| LEGISLATURE OF THE STATE OF IDAHO ||||
Fifty-sixth Legislature Second Regular Session - 2002
IN THE SENATE
SENATE BILL NO. 1364
BY JUDICIARY AND RULES COMMITTEE
1 AN ACT
2 RELATING TO DISHONORED CHECKS; AMENDING SECTION 1-2301A, IDAHO CODE, TO PRO-
3 VIDE FOR WRITTEN DEMAND BY REGULAR MAIL SUPPORTED BY AFFIDAVIT; AMENDING
4 SECTION 28-22-105, IDAHO CODE, TO CLARIFY MAILING REQUIREMENTS FOR NOTICES
5 OF DISHONOR AND TO MAKE TECHNICAL CORRECTIONS; AMENDING SECTION 28-22-106,
6 IDAHO CODE, TO REVISE PROVISIONS FOR NOTICE OF DISHONOR; AND AMENDING SEC-
7 TION 28-22-107, IDAHO CODE, TO CLARIFY MAILING REQUIREMENTS FOR NOTICES OF
8 DISHONOR AND TO MAKE TECHNICAL CORRECTIONS.
9 Be It Enacted by the Legislature of the State of Idaho:
10 SECTION 1. That Section 1-2301A, Idaho Code, be, and the same is hereby
11 amended to read as follows:
12 1-2301A. DRAWING CHECK WITHOUT FUNDS OR INSUFFICIENT FUNDS -- CIVIL LIA-
13 BILITY. In any action filed in the small claims department against a person
14 who makes any check, draft or order for the payment of money which has been
15 dishonored for lack of funds or credit to pay the same, or because the maker
16 has no account with the drawee, the plaintiff, or a collection agency with a
17 permit issued to it pursuant to section 26-2229, Idaho Code, which is attempt-
18 ing to collect the dishonored check under a written agreement with the payee
19 or holder of the check, may recover from the defendant the amount of the
20 check, draft or order and, in addition thereto, the greater of the amount of
21 one hundred dollars ($100) or three (3) times the amount for which the check,
22 draft or order is drawn. Except as provided in section 1-2304, Idaho Code, the
23 plaintiff or collection agency may recover no other costs, fees, charges or
24 damages. However, damages recovered under the provisions of this section shall
25 not exceed by more than five hundred dollars ($500) the value of the check,
26 draft or order and may be awarded only if the plaintiff made written demand of
27 the defendant for payment of the amount of the check, draft or order not less
28 than ten (10) days before commencing the action, and if the defendant failed
29 to tender to the plaintiff, prior to commencement of the action, an amount of
30 money not less than the amount demanded. The written demand required by this
31 section shall be sent to the maker by certified mail at his last known
32 address, or by regular mail, supported by an affidavit of service by mailing,
33 to the address printed or written on the check as provided in section
34 28-22-106, Idaho Code, in which case the demand shall be deemed conclusive
35 three (3) days following the date the affidavit is executed. The written
36 demand and shall fully advise the maker of the check, draft, or order of the
37 consequences of failure to make prompt payment under this section. The plain-
38 tiff or collection agency must show proof of service by producing a copy of a
39 signed return receipt or affidavit of personal service.
40 SECTION 2. That Section 28-22-105, Idaho Code, be, and the same is hereby
41 amended to read as follows:
2
1 28-22-105. CHECKS DISHONORED BY NONACCEPTANCE OR NONPAYMENT -- LIABILITY
2 FOR INTEREST -- COLLECTION COSTS AND ATTORNEY'S' FEES. Whenever a check, as
3 defined in section 28-3-104, Idaho Code, has been dishonored by nonacceptance
4 or nonpayment and has not been paid within fifteen (15) days and after the
5 holder of such check sends such notice of dishonor as provided in section
6 28-22-106, Idaho Code, to the drawer, at his last known address, then if the
7 check does not provide for the payment of interest, or collection costs and
8 attorney's' fees, the drawer of such check shall also be liable for payment of
9 interest at the rate of twelve percent (12%) per annum from the date of dis-
10 honor and cost of collection not to exceed twenty dollars ($20.00) or the face
11 amount of the check, whichever is the lesser; provided however, that if the
12 holder of the dishonored check has the right to collect a set fee under a
13 written agreement or has notified the drawer by a posted notice at the point
14 of sale that the drawer will be required to pay a set collection fee if the
15 check is dishonored, the holder is not required to give the notice of dishonor
16 as provided in section 28-22-106, Idaho Code, and may assess a collection cost
17 of the notice amount regardless of the size of the check, but the set fee may
18 not exceed twenty dollars ($20.00). In addition, in the event of court action
19 on the check, the court, after such notice and the expiration of said fifteen
20 (15) days, shall award reasonable attorney's' fees as part of the damages pay-
21 able to the holder of the check. No attorney's' fees may be awarded to a col-
22 lection agency in a proceeding pursuant to section 1-2301A, Idaho Code. The
23 provisions of this section shall not apply to any check which has been dishon-
24 ored by reason of any justifiable stop payment order.
25 SECTION 3. That Section 28-22-106, Idaho Code, be, and the same is hereby
26 amended to read as follows:
27 28-22-106. STATUTORY FORM FOR NOTICE OF DISHONOR. The notice of dishonor
28 shall be sent either:
29 (1) Bby certified mail to the drawer at his last known address, and said
30 or
31 (2) By regular mail, supported by an affidavit of service by mailing, to
32 the address printed or written on the check.
33 (a) The affidavit of service by mailing shall be retained by the payee or
34 holder of the check.
35 (b) Notice shall be deemed conclusive three (3) days following the date
36 the affidavit is executed.
37 (c) The affidavit of service shall be substantially in the following
38 form:
39 STATE OF ) AFFIDAVIT OF SERVICE
40 ) BY MAIL
41 COUNTY OF )
42 ...................., being first duly sworn on oath, deposes and
43 states that he/she is of legal age and that on (date)..........,
44 ...., he/she served the attached Notice of Dishonor, by placing a
45 true and correct copy thereof securely enclosed in an envelope
46 addressed as follows:
47 ..............................
48 ..............................
49 ..............................
50 ..............................
3
1 and deposited the same, with postage prepaid, in the United States
2 mail at ......................., ......................
3 .........................
4 (Signature)
5 Subscribed and sworn to before me this .... day of ............,
6 .....
7 .........................
8 Notary Public
9 ........County,..........
10 (SEAL)
11 (3) The notice of dishonor shall be substantially in the following form:
12 NOTICE OF DISHONOR OF CHECK
13 A check drawn by you and made payable by you to .......... in
14 the amount of .......... has not been accepted for payment by
15 .........., which is the drawee bank designated on your check. This
16 check is dated .........., and it is numbered, No. .........
17 You are CAUTIONED that unless you pay the amount of this check
18 within fifteen (15) days after the date this letter is postmarked,
19 you may very well have to pay the following additional amounts:
20 (1) Costs of collecting the amount of the check, including an
21 attorney fee which will be set by the court; and
22 (2) Interest on the amount of the check which shall accrue at
23 the rate of twelve percent (12%) per annum from the date of dishonor.
24 You are advised to make your payment to .......... at the fol-
25 lowing address: ...........
26 (4) The issuance of a check with an address printed or written on it is a
27 representation by the drawer that the address is the correct address for
28 receipt of mail concerning the check. Failure of the drawer to receive a regu-
29 lar or certified mail notice sent to that address is not a defense to liabil-
30 ity under this section provided the drawer has had actual notice for fifteen
31 (15) days that the check has been dishonored.
32 (5) The check is prima facie evidence of the identity of the drawer if
33 the name, home or work address, and home or work telephone number of the
34 drawer are either recorded by the person receiving the check or printed on the
35 face of the check.
36 SECTION 4. That Section 28-22-107, Idaho Code, be, and the same is hereby
37 amended to read as follows:
38 28-22-107. CONSEQUENCES FOR FAILING TO COMPLY WITH REQUIREMENTS. No
39 interest, collection costs and attorney's' fees shall be recovered on any dis-
40 honored check under the provisions of section 28-22-105, Idaho Code, where the
41 holder of such check or any agent, employee or assignee of the holder has
42 demanded:
43 (1) Interest or collection costs in excess of that provided in section
44 28-22-105, Idaho Code; or
45 (2) Interest or collection costs prior to the expiration of fifteen (15)
46 days after the certified mailing of notice of dishonor, as provided in sec-
4
1 tions 28-22-105 and 28-22-106, Idaho Code; or
2 (3) Attorney's' fees, either without having such fees set by the court,
3 or prior to the expiration of fifteen (15) days after the certified mailing of
4 notice of dishonor, as provided in sections 28-22-105 and 28-22-106, Idaho
5 Code.
6 The provisions of this section shall not prohibit the collection of a set
7 collection fee which does not exceed twenty dollars ($20.00), if the holder
8 has the right to collect a set fee under a written agreement or has notified
9 the drawer at the point of sale that the drawer will be required to pay the
10 set collection fee in the event a check is dishonored.
STATEMENT OF PURPOSE
RS ll773Cl
This legislation changes the mailing requirements and provisions
of notice for dishonored checks to simplify and update the current
statutes, alleviating some of the escalating costs usually absorbed
by the holder of the check.
Under current statute, the holder of a dishonored check cannot take
action to recover the value of the check until a written demand or
notice of dishonor is sent by certified mail with return receipt.
This practice currently costs $3.60 in postage per notice, and more
than 60 percent of the notices mailed are returned as undeliverable
or refused. Thus, the holder cannot continue with the collection
process.
This legislation will allow the notice of dishonor to be sent by
first class or regular mail supported by a sworn statement that the
notice was mailed on a specific date. After mailing the notice to
the address printed or written on the check, the holder can continue
with the collection process.
FISCAL IMPACT
There will be no impact on the General Fund, and no additional cost
to the state or local governments.
CONTACT: Pam Eaton, Idaho Retailers Association
(208) -342-0010
STATEMENT OF PURPOSE/FISCAL NOTE S 1364