H 4109 Session 111 (1995-1996)
H 4109 General Bill, By Jennings and J.L.M. Cromer
A Bill to amend Section 34-11-60, Code of Laws of South Carolina, 1976,
relating to fraudulent checks, so as to provide that no warrant for fraudulent
check violations may be obtained more than ninety days rather than one hundred
eighty days after the date the check was uttered; to amend Section 34-11-70,
as amended, relating to fraudulent checks, so as to increase the service
charges and administrative costs which shall be paid to the payee of the
instrument and the court from twenty to twenty-five dollars and to provide
that persons applying for a warrant for prosecution who fail to provide
certain required notice to the court upon satisfaction of the instrument shall
pay a civil penalty of twenty-five dollars.-short title
04/12/95 House Introduced and read first time HJ-51
04/12/95 House Referred to Committee on Judiciary HJ-52
A BILL
TO AMEND SECTION 34-11-60, CODE OF LAWS OF SOUTH
CAROLINA, 1976, RELATING TO FRAUDULENT CHECKS,
SO AS TO PROVIDE THAT NO WARRANT FOR
FRAUDULENT CHECK VIOLATIONS MAY BE OBTAINED
MORE THAN NINETY DAYS RATHER THAN ONE HUNDRED
EIGHTY DAYS AFTER THE DATE THE CHECK WAS
UTTERED; TO AMEND SECTION 34-11-70, AS AMENDED,
RELATING TO FRAUDULENT CHECKS, SO AS TO
INCREASE THE SERVICE CHARGES AND ADMINISTRATIVE
COSTS WHICH SHALL BE PAID TO THE PAYEE OF THE
INSTRUMENT AND THE COURT FROM TWENTY TO
TWENTY-FIVE DOLLARS AND TO PROVIDE THAT
PERSONS APPLYING FOR A WARRANT FOR PROSECUTION
WHO FAIL TO PROVIDE CERTAIN REQUIRED NOTICE TO
THE COURT UPON SATISFACTION OF THE INSTRUMENT
SHALL PAY A CIVIL PENALTY OF TWENTY-FIVE
DOLLARS; TO AMEND SECTION 34-11-90, AS AMENDED,
RELATING TO FRAUDULENT CHECKS, SO AS TO REFLECT
THE ABOVE INCREASES IN THE SERVICE CHARGES AND
ADMINISTRATIVE COSTS AND TO INCREASE THE
AMOUNT OF THE FINES WHICH MAY BE IMPOSED FOR
CERTAIN VIOLATIONS; BY ADDING SECTION 34-11-85 SO
AS TO REQUIRE BANKS OR FINANCIAL INSTITUTIONS TO
VERIFY ALL EMPLOYMENT AND FINANCIAL
INFORMATION GIVEN ON THE APPLICATION FOR A
CHECKING ACCOUNT, TO CAUSE THE DATE THE
CHECKING ACCOUNT WAS OPENED TO BE PLACED ON
THE FACE OF THE CHECKS THE CONSUMER ORDERS
THROUGH THE BANK, AND TO REQUIRE THE BANK TO
NUMBER THESE CHECKS BEGINNING WITH THE NUMBER
`100'; BY ADDING SECTION 34-11-86 SO AS TO REQUIRE
CERTAIN PERSONS WITH MULTIPLE FRAUDULENT CHECK
CONVICTIONS TO PROVIDE A BOND OR OTHER
FINANCIAL GUARANTEE TO THE BANK OR FINANCIAL
INSTITUTION WHERE HIS CHECKING ACCOUNT IS OR
WILL BE LOCATED TO INDEMNIFY A PAYEE, ENDORSEE,
OR THIRD PARTY AGAINST LOSS; AND BY ADDING
SECTION 37-17-10 SO AS TO REQUIRE CERTAIN PERSONS
ENGAGING IN CHECK COLLECTION SERVICES FOR A FEE
TO PROVIDE A BOND OR FINANCIAL GUARANTEE TO THE
DEPARTMENT OF CONSUMER AFFAIRS TO INDEMNIFY
THOSE RETAINING THE SERVICES OF THAT PERSON
FROM ANY LOSS THEY MAY SUSTAIN.
Be it enacted by the General Assembly of the State of South
Carolina:
SECTION 1. Section 34-11-60(e) of the 1976 Code is amended
to read:
"(e) No warrant for a violation of this section may be
obtained more than one hundred eighty ninety days
after the date the check was uttered."
SECTION 2. Section 34-11-70 of the 1976 Code, as last
amended by Act 36 of 1991, is further amended to read:
"Section 34-11-70. (a) When a check, a draft, or other
written order is not paid by the drawee because the maker or
drawer did not have an account with or sufficient funds on deposit
with the bank or the person upon which it was drawn when
presented or the draft, check, or other written order has an incorrect
or insufficient signature on it, and the maker or drawer does not
pay the amount due on it, together with a service charge of
twenty twenty-five dollars, within ten days after
written notice has been sent by certified mail to the address printed
on the check or given at the time it is tendered or provided on a
check-cashing identification card stating that payment was refused
upon the instrument, then it constitutes prima facie evidence of
fraudulent intent against the maker. Service charges collected
pursuant to this section must be paid to the payee of the instrument.
(1) For purposes of subsection (a), notice must be given by
mailing the notice with postage prepaid addressed to the person at
the address as printed or written on the instrument. The giving of
notice by mail is complete upon the expiration of ten days after the
deposit of the notice in the mail. A certificate by the payee that the
notice has been sent as required by this section is presumptive proof
that the requirements as to notice have been met, regardless of the
fact that the notice actually might not have been received by the
addressee. The form of notice must be substantially as follows:
You are notified that a check or instrument, numbered ____,
issued by you on ____ (date), drawn upon ____ (name of bank),
and payable to ____, has been dishonored. Pursuant to South
Carolina law, you have ten days from the date this notice was
mailed to tender payment of the full amount of the check or
instrument plus a service charge of twenty
twenty-five dollars, the total amount due being __ dollars
and ___ cents. Unless this amount is paid in full within the
specified time above, the holder of the check or instrument may
turn over the dishonored check or instrument and all other available
information relating to this incident to the solicitor or other
appropriate officer for criminal prosecution.
(2) When a person instituting prosecution gives notice in
substantially similar form provided in item (1) to the person and the
bank upon which the instrument was drawn and waits ten days from
the date notice is mailed before instituting the criminal proceedings,
there arises a presumption that the prosecution was instituted for
reasonable and probable cause, and the person instituting
prosecution is immune from civil liability for the giving of the
notice.
(3) A service charge of not more than twenty
twenty-five dollars is payable by the drawer of a draft, a
check, or other written order to the payee of the instrument when
the draft, check, or other written order is presented for payment in
whole or in part of a then existing debt, including, but not limited
to, consumer credit transactions, and is dishonored. This service
charge is solely to compensate the payee of the instrument for
incurred expenses in processing the dishonored instrument and is
not related to a presumption of fraud so that it is not necessary to
issue the notice to the person at the address as printed on the
instrument set forth in items (1) and (2).
(b) Any court, including magistrate's, may dismiss a case under
the provisions of this chapter for want of prosecution. When any
prosecutions are initiated under this chapter, the party applying for
the warrant is held liable for all reasonable administrative costs
accruing not to exceed twenty twenty-five dollars if
the case is dismissed for want of prosecution. Unless waived by the
court, the party applying for the warrant shall notify, orally or
otherwise, the court not less than twenty-four hours before the date
and time set for trial that full restitution has been made in
connection with the warrant, and the notification relieves that party
of the responsibility of prosecution. Any person applying for the
warrant who fails to provide the notice required by this subsection
shall pay a civil penalty of twenty-five dollars to the court upon its
order.
(c) Any court, including magistrate's, may dismiss any
prosecution initiated pursuant to the provisions of this chapter on
satisfactory proof of restitution and payment by the defendant of all
administrative costs accruing not to exceed twenty
twenty-five dollars submitted before the date set for trial
after the issuance of a warrant. (d) For purposes of this chapter,
subsequent persons receiving a check, draft, or other written order
by endorsement from the original payee or a successor endorsee
have the same rights that the original payee has against the maker
of the instrument, if the maker of the instrument has the same
defenses against subsequent persons as he may have had against the
original payee. However, the remedies available under this chapter
may be exercised only by one party in interest."
SECTION 3. Section 34-11-90 of the 1976 Code, as last
amended by Act 609 of 1990, is further amended to read:
"Section 34-11-90. A person violating the provisions of
this chapter, upon conviction, for a first or second offense must be
punished as follows:
If the amount of the instrument is five hundred dollars or less, it
must be tried exclusively in a magistrate's court. A municipal
governing body, by ordinance, may adopt by reference the
provisions of this chapter as an offense under its municipal
ordinances and by so doing authorizes its municipal court to try
violations of this chapter. If the amount of the instrument is over
five hundred dollars, it must be tried in the court of general
sessions or any other court having concurrent jurisdiction.
Notwithstanding the provisions of this paragraph, a person violating
the provisions of this chapter, upon conviction for a third or
subsequent conviction, may be tried in either a magistrate's court or
in the court of general sessions.
(a) Convictions in a magistrate's court are punishable as
follows: for a first conviction by a fine of not less than fifty dollars
nor more than two five hundred dollars or by
imprisonment for not more than thirty days; for a second or
subsequent conviction by a fine of not less than two
hundred dollars nor more than five hundred dollars or by
imprisonment for thirty days.
(b) Convictions in the court of general sessions or any other
court having concurrent jurisdiction are punishable as follows: for a
first conviction by a fine of not less than three hundred dollars nor
more than one thousand dollars or by imprisonment for not more
than two years, or both; and for a second and each subsequent
conviction by a fine of not less than five hundred dollars nor more
than two thousand dollars and imprisonment for not less than thirty
days nor more than ten years.
(c) After a first offense conviction for drawing and uttering a
fraudulent check or other instrument in violation of Section
34-11-60 within its jurisdiction, the court shall, at the time of
sentence, suspend the imposition or execution of a sentence upon a
showing of satisfactory proof of restitution and payment by the
defendant of all reasonable court costs accruing not to exceed
twenty twenty-five dollars. For a second and
subsequent convictions for violation of Section 34-11-60, the
suspension of the imposition or execution of the sentence shall be
discretionary with the court.
(d) After a conviction or plea for drawing and uttering a
fraudulent check or other instrument in violation of Section
34-11-60 and the defendant is charged or fined, he shall pay in
addition to the fine all reasonable court costs accruing, not to
exceed twenty twenty-five dollars, and the service
charge provided in Section 34-11-70.
(e) After a conviction under this section on a first offense, the
defendant may, after one year from the date of the conviction,
apply, or cause someone acting on his behalf to apply, to the court
for an order expunging the records of the arrest and conviction.
This provision does not apply to any crime classified as a felony. If
the defendant has had no other conviction during the one-year
period following the conviction under this section, the court shall
issue an order expunging the records. No person has any rights
under this section more than one time. After the expungement, the
South Carolina Law Enforcement Division is required to keep a
nonpublic record of the offense and the date of its expungement to
ensure that no person takes advantage of the rights permitted by this
subsection more than once. This nonpublic record is not subject to
release under Section 34-11-95, the Freedom of Information Act, or
any other provision of law except to those authorized law or court
officials who need to know this information in order to prevent the
rights afforded by this subsection from being taken advantage of
more than once.
As used in this section the term "conviction" shall
include the entering of a guilty plea, the entering of a plea of nolo
contendere, or the forfeiting of bail. A conviction is classified as a
felony if the instrument drawn or uttered in violation of this chapter
exceeds the amount of five thousand dollars.
Each instrument drawn or uttered in violation of this chapter
shall constitute a separate offense.
SECTION 4. The 1976 Code is amended by adding:
"Section 34-11-85. Any bank or financial institution
before opening a new checking account for any customer must
verify all employment and financial information given on the
application for the checking account.
(B) Any bank or financial institution after opening a new
checking account for any customer must:
(1) cause the date the checking account was opened to be
placed on the face of all checks that customer orders through the
bank or financial institution; and
(2) cause the checks the customer orders through the bank or
financial institution to begin with the number `100'."
SECTION 5. The 1976 Code is amended by adding:
"Section 34-11-86. Any person who has ten or more
convictions for violations of this chapter or Section 16-13-10 which
involves a check must provide a bond or other financial guarantee
in the amount of five thousand dollars to the bank or financial
institution where his checking account is or will be located. This
bond or financial guarantee shall indemnify any payee, endorsee, or
third party against any loss which may be sustained as a result of
that person issuing or uttering a fraudulent check."
SECTION 6. Title 37 of the 1976 Code is amended by
adding:
"CHAPTER 17
Check Collection Services
Section 37-17-10. (A) As used in this section:
(1) `Check' means a check, money order, or other instrument
for the payment or transmission of money, whether or not it is a
negotiable instrument under the terms of Chapter 3, Title 36,
relating to commercial paper under the Uniform Commercial Code.
(2) `Department' means the South Carolina Department of
Consumer Affairs.
(B) No person or corporation, other than a bank or trust
company, a credit union, a savings and loan association, a financial
institution, or a savings bank, whether state or federally charted,
may engage in the business of check collection services for a fee
without having first provided a bond or other financial guarantee in
the amount of ten thousand dollars to the department. This bond or
financial guarantee shall indemnify any person retaining the services
of that check collection business from any loss he may sustain as a
result of the negligence, malfeasance, or criminal conduct of that
check collection business or individuals associated with it.
(C) A magistrate may require a person engaged in the business
of check collection services to which subsection (B) applies to show
evidence of the bond or guarantee required by subsection (B) before
allowing that person to act for a third party in a check collection
matter under the jurisdiction of his court.
(D) The provisions of this section do not apply to any person
attempting to collect a check on which he or any entity with which
he is employed was the payee or an endorsee."
SECTION 7. This act takes effect upon approval by the
Governor.
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