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Do you understand what state law says about writing bad checks?

The term theft generally makes people think of shoplifting, burglary or even wire fraud. While these acts can all be classified as types of theft, there are other acts which may not be quite so obvious to the average person, but which can be equally serious in nature.

By way of illustration, consider the crime of writing a bad check or a bad check violation as it is referred to under state law. Many people might think this crime seldom occurs in an era where payment is most often made with just the swipe of a card or the entering of a few characters on a keypad, but this is actually far from the case.

What exactly constitutes a bad check violation?

Bad check violations occur when a business or person is issued a check for an immediate exchange of services and goods that is refused for payment upon presentation to the bank or institution upon which it was drawn.  

What is meant by “an immediate exchange of services and goods?”

Here, it’s important to understand that not all bounced checks are tantamount to bad check violations. Indeed, a bounced check submitted as payment under a contract (i.e., car payments, rent, utilities, etc.) is not treated as a bad check violation and must instead be pursued as a civil lawsuit.

Similarly, if a person or business agrees to hold a check until the passage of a few days or a set date, this is tantamount to the extension of credit. Consequently, if the check is later refused for payment, criminal charges cannot be pursued as the exchange was not immediate and a civil lawsuit is the only available relief.

If a check is “refused for payment,” does this just mean there were insufficient funds to draw upon?

No. A bad check violation occurs where payment was refused due to insufficient funds, a closed account, an nonexistent account or an account being subject to a hold.

We will continue this discussion in our next post, including examining some of the criminal penalties associated with bad check violations.

Source: District Court of Maryland, “Bad checks,” Accessed Jan. 5, 2015

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