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6 AN ACT RELATING TO FINANCIAL INSTITUTIONS; INCREASING THE DISHONORED
7 CHECK SERVICE CHARGE FOR MERCHANTS OR SERVICE PROVIDERS; ALLOWING
8 FOR DAMAGES; AND MAKING TECHNICAL CORRECTIONS.
9 This act affects sections of Utah Code Annotated 1953 as follows:
11 7-15-1, as last amended by Chapters 52 and 128, Laws of Utah 1988
12 7-15-2, as last amended by Chapters 52 and 128, Laws of Utah 1988
13 7-15-3, as enacted by Chapter 52, Laws of Utah 1988
14 Be it enacted by the Legislature of the state of Utah:
15 Section 1. Section 7-15-1 is amended to read:
16 7-15-1. Definitions -- Civil liability of a writer of a check -- Notice of action --
17 Collection costs.
18 (1) [
19 (a) "check" means any check, draft, order, or other instrument upon any depository
21 (b) "costs of collection " includes reasonable compensation, as approved by the court in
22 a civil action brought under this section, for time expended if the collection is pursued personally
23 by the merchant or service provider as holder of a check and not through an agent;
24 (c) "merchant or service provider" means a holder of a check from a writer of a check; and
25 (d) "writer of a check" means a person who makes, draws, signs, or issues any check,
27 otherwise, for the purpose of:
1 (i) obtaining from [
2 provider any money, merchandise, property, or other thing of value; or
3 (ii) paying for any service, wages, salary, or rent.
4 (2) A writer of a check is liable to the [
6 (a) the check[
7 (i) is not honored upon presentment; and
8 (ii) is marked "refer to maker"; or
9 (b) the account upon which the check[
10 or drawn:
11 (i) does not exist[
12 (ii) has been closed[
13 (iii) does not have sufficient funds or sufficient credit for payment in full of the check[
17 (a) give written or verbal notice of dishonor to the [
19 (b) impose a service charge that may not exceed [
20 (4) Prior to filing an action based upon this section, the [
23 written notice of intent to file civil action, allowing the person seven days from the date on which
24 the notice was mailed to tender payment in full, plus the service charge imposed for the dishonored
28 who holds the check for:
29 (a) the amount of the check[
30 (b) interest; [
31 (c) all costs of collection, including all court costs and reasonable attorneys' fees[
4 (d) damages that are the lesser:
5 (i) of $500; and
6 (ii) the greater of:
7 (A) three times the amount of the check; and
8 (B) $100.
9 Section 2. Section 7-15-2 is amended to read:
10 7-15-2. Notice -- Form.
11 (1) (a) [
13 person or in writing.
14 (b) A written notice is conclusively presumed to have been given when the notice is:
15 (i) properly deposited in the United States mails, postage prepaid, by certified or registered
16 mail, return receipt requested[
17 (ii) addressed to the [
18 (A) the writer of the check's address as it appears on the check[
20 (B) at [
21 (2) Written notice as applied in Subsection 7-15-1[
22 following form:
23 Date: ____
24 To: _____
25 You are hereby notified that the check(s) described below issued by you has (have) been
26 returned to us unpaid:
29 Originating institution: ____
30 Amount: ____
31 Reason for dishonor (marked on [
2 to the undersigned within seven days from the date of this notice in accordance with Section
3 7-15-1, Utah Code Annotated 1953, or appropriate civil legal action may be filed against you for
4 the amount due and owing together with service charges, interest, court costs, attorneys' fees, [
5 actual costs of collection, and damages as provided by law.
6 In addition, the criminal code provides in Section 76-6-505, Utah Code Annotated 1953,
7 that any person who issues or passes a check for the payment of money, for the purpose of
8 obtaining from any person, firm, partnership, or corporation, any money, property, or other thing
9 of value or paying for any services, wages, salary, labor, or rent, knowing it will not be paid by the
10 drawee and payment is refused by the drawee, is guilty of issuing a bad check.
11 The civil action referred to in this notice does not preclude the right to prosecute under the
12 criminal code of the state of Utah.
13 (Signed) _____________________________________________________________
14 Name of Holder: _______________________________________________________
15 Address of Holder: _____________________________________________________
16 Telephone Number: ____________________________________________________
17 Section 3. Section 7-15-3 is amended to read:
18 7-15-3. Liability of financial institution upon wrongful dishonor.
19 If a person is liable to a [
20 the liability is proximately caused by a financial institution's wrongful dishonor under Section
21 70A-4-402, any award against the financial institution under Section 70A-4-402 shall include, but
22 not be limited to, all amounts awarded against the person to the [
23 provider under Section 7-15-1.
Legislative Review Note
as of 1-2-97 11:52 AM
A limited legal review of this bill raises no obvious constitutional or statutory concerns.
Office of Legislative Research and General Counsel
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