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Hot checks and banks

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May 24, 2004, 15:45
John Dodson
Hot checks and banks
Check written to merchant. Check returned by bank for insufficient funds. On Feb. 4, 2004, Merchant makes demand for the amount of the check plus "returned check fee" of $30.00. On March 4, 2004, merchant gets letter from bank asking merchant to redeposit the check, not charge their customer and remove their customer from any hot check lists, because the hot check was the bank's fault. Merchant still wants the "returned check fee" on top of the face amount of the check. Can it still be collected? I am inclined to tell the merchant to just deposit the check and move on. Any thoughts?
May 25, 2004, 07:51
mike bartley
In the end, it wasn't a hot check. Bank admits their error. The bank is not required to pay the $30 and neither is the check writer, who did nothing wrong. Merchant is greedy and goes to the penalty box for 10 mintues.
May 25, 2004, 11:17
Tim Cole
Tell merchant to apologize to the wronged customer, even though it wasn't merchant's fault, and maybe he won't be named as a party to the lawsuit for injury to customer's reputation for wrongfully being accused of a crime. Just my opinion, but with this kind of attitude I wouldn't think this particular merchant has a bright and long future in his business.
May 25, 2004, 11:20
John Dodson
Thanks for the replies. As always, this forum is a tremendous resource for me.
May 25, 2004, 12:59
Martin Peterson
Interestingly, both art. 9022 and sec. 3.506 refer only to a "dishonored check". Even if ultimately paid, maybe that term refers to any check not paid when first presented. Of course, all the statute does is make the fee chargeable. Without the threat of a criminal prosecution, I doubt the fee would ever be collectable and even if a prosecutor is involved in collecting the face amount of the check, 102.007(e) imposes no mandatory obligation to collect the 3.506 fee. Even if the bank breached its depositary agreement with its customer, I would not think you would want to get in the middle of that civil dispute.