Current Status Bill Number:4109 Type of Legislation:General Bill GB Introducing Body:House Introduced Date:19950412 Primary Sponsor:Jennings All Sponsors:Jennings and Cromer Drafted Document Number:gjk\21682sd.95 Residing Body:House Current Committee:Judiciary Committee 25 HJ Subject:Fraudulent checks
Body Date Action Description Com Leg Involved
______ ________ _______________________________________ _______ ____________
House 19950412 Introduced, read first time, 25 HJ
referred to Committee
View additional legislative information at the LPITS web site.
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:
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.