March 19, 2015 by Lisa Brammer
Let’s say you’re on your way home from work when you decide to stop at your favorite convenience store to pick up a few needed items, nothing too crazy: diapers, milk, and a few frozen pizzas. When you get to the checkout counter, the girl ringing you up gives you the total, 45 dollars—even. Cool! You whip out your check book, pay, grab your items and are on your way. A few days later you receive a text from your bank informing you of a bounced check for $45.00. The convenience store purchase immediately pops into your head. Oops! You count how many days you have until payday and calculate bills owed. I should be okay, you think and continue on with your life.
Next thing you know you receive a call from the store. On the spot, you tell them to resubmit the check. Then a second notice comes from your bank—it still hasn’t cleared. The problem now is the bank has charged you their non-sufficient funds (NFS) fee—twice—and the money that was going to pay back the store has been spent on those fees. The expletive that comes out of your mouth is no longer oops! Angry over the unfortunate turn of events you realize the store is going to have to wait for their money, but it’s no big deal because how much worse could it get? Short answer; worse, way worse.
Just because the amount you owe seems insignificant doesn’t mean the business won’t go after you. And these small debts can turn into something quite big. Just ask Dr. Christina Johnson-Conley of Lacey Washington. She was in the news a while back when the $30 bounced check she gave her children’s school for lunches turned into over $700 worth of charges that were garnished from her wages.
How can this happen? Let me explain by talking about the bounced $45 check written to your convenience store. Forty-five dollars, no big deal, right? But the thing is, the United States economy is built on the premise that when consumers purchase goods, services or credit, they are expected to repay what they owe. In the case of the bounced check, there is an expectation the check be made good, so much so there are actual bad check laws (statutes) to protect businesses that accept checks.
There are both civil and criminal penalties for this unlawful act. In Wisconsin, where we are, the civil penalties include three times the amount of the check and all actual costs of legal action including attorney fees. The three times penalty is called exemplary or punitive damages which means it’s there to punish the check writer and deter them and others from repeating the offense. It’s there to get your attention—and believe me it will!
So, if you kept ignoring the storekeeper (or the collection agency he sent the bad check to) that $45.00 could likely grow into a sizable debt, just like Johnson-Conley’s check did.
I’ve seen small bad checks turn into large debts quickly because consumers ignore letters and calls from first the establishment they wrote the check to and then the collection agency that received the bad check. I also know of instances where a consumer has asked the agency to cease contact with them—certainly within their rights. And when an agency is asked to stop contact, the law requires them to stop. But here’s the thing, stopping contact does not stop the collection process.
If the debt caused by the bad check continues to go unpaid, the next step in the process may be to call an attorney and when this happens, look out, because this is when your debt is going to grow. This is where those exemplary damages we talked about will come into play. And, since a lawyer is involved—you know how much they charge—their costs will also get added to your bill. Add to it the storekeeper’s bank fees (yes, the storekeeper is charged a fee when a check they try to deposit bounces) and if the establishment has a check policy posted at point-of-sale, those fees can also be added. And depending on where you live, a process server might also have to be hired to deliver the summons and complaint which starts the lawsuit. Guess who is going to be paying her fee? Cha ching!
Let’s recap; you’re now being charged for the original 45 dollars check, 135 dollars in exemplary damages, the attorney’s fees at about 300 dollars (or more) per hour, the process server’s cost of about 65 bucks along with bank fees and any fees posted for check bouncing at point-of sale. Boom!
Now they have your attention, you call to settle up. But if you think these extra charges can be negotiated away, think again. Once all that time has lapsed and the legal wheels are in motion, you cannot reset the clock. The money has been spent and there is very little wiggle room for negotiations. And if you wait and end up in court, these numbers will continue to grow as court costs escalate.
Now you’re thinking, seriously?? This won’t happen to me. But the thing is, it could. The initiation of a lawsuit is never done without careful deliberation, but when a consumer is uncooperative, this may be the only viable option for procuring payment. This is why it’s always important to address any debt—no matter how small. Contact whomever you owe and let them know you are having financial difficulties and work out a payment agreement together. The sooner you address the problem, the better it will be for you all, win-win.
Founded in 1950, United Credit Service, Inc. is a full service, licensed revenue cycle management and debt collection agency in Wisconsin providing effective, customized one on one management and recovery solutions for our business partners. Visit our website at http://www.unitedcreditservice.com or call 877-723-2902.