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First Substitute H.B. 218
6 AN ACT RELATING TO FINANCIAL INSTITUTIONS; INCREASING THE DISHONORED
7 CHECK SERVICE CHARGE FOR MERCHANTS OR SERVICE PROVIDERS; AND
8 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 Be it enacted by the Legislature of the state of Utah:
14 Section 1. Section 7-15-1 is amended to read:
15 7-15-1. Civil liability of issuer -- Notice of action -- Collection costs.
16 (1) Any person who makes, draws, signs, or issues any check, draft, order, or other
17 instrument upon any depository institution, whether as corporate agent or otherwise, for the
18 purpose of obtaining from any person, firm, partnership, or corporation any money, merchandise,
19 property, or other thing of value or paying for any service, wages, salary, or rent is liable to the
20 holder of the check, draft, order, or other instrument if:
21 (a) the check, draft, order, or other instrument:
22 (i) is not honored upon presentment; and
23 (ii) is marked "refer to maker"; or
24 (b) the account upon which the check, draft, order, or other instrument has been made or
26 (i) does not exist[
27 (ii) has been closed[
1 (iii) does not have sufficient funds or sufficient credit for payment in full of the check,
2 draft, or other instrument.
3 (2) The holder of the check, draft, order, or other instrument [
4 dishonored may:
5 (a) give written or verbal notice of dishonor to the person making, drawing, signing, or
6 issuing the check, draft, order, or other instrument; and [
7 (b) impose a service charge that may not exceed [
8 (3) Prior to filing an action based upon this section, the holder of a dishonored check,
9 draft, order, or other instrument shall give the person making, drawing, signing, or issuing the
10 dishonored check, draft, order, or other instrument written notice of intent to file civil action,
11 allowing the person seven days from the date on which the notice was mailed to tender payment
12 in full, plus the service charge imposed for the dishonored check, draft, order, or other instrument.
14 order, or other instrument is liable to the holder for:
15 (a) the amount of the check, draft, order, or other instrument;
16 (b) interest; and
17 (c) all costs of collection, including all court costs and reasonable attorneys' fees.
19 as approved by the court, for time expended if the collection is pursued personally by the holder
20 and not through an agent.
21 Section 2. Section 7-15-2 is amended to read:
22 7-15-2. Notice -- Form.
23 (1) (a) "Notice" means notice given to the person making, drawing, or issuing the check,
24 draft, order, or other instrument either in person or in writing.
25 (b) A written notice is conclusively presumed to have been given when properly deposited
26 in the United States mails, postage prepaid, by certified or registered mail, return receipt requested,
27 and addressed to the signer at [
28 other instrument or at [
29 (2) Written notice as applied in Subsection 7-15-1[
30 following form:
31 Date: ____
1 To: _____
2 You are hereby notified that the check(s) described below issued by you has (have) been
3 returned to us unpaid:
4 Instrument date: ____
5 Instrument number: ____
6 Originating institution: ____
7 Amount: ____
8 Reason for dishonor (marked on instrument): ____
9 This instrument, together with a service charge of [
10 undersigned within seven days from the date of this notice in accordance with Section 7-15-1, Utah
11 Code Annotated [
12 due and owing together with service charges, interest, court costs, attorneys' fees, and actual costs
13 of collection as provided by law.
14 In addition, the criminal code provides in Section 76-6-505, Utah Code Annotated [
15 that any person who issues or passes a check for the payment of money, for the purpose of
16 obtaining from any person, firm, partnership, or corporation, any money, property, or other thing
17 of value or paying for any services, wages, salary, labor, or rent, knowing it will not be paid by the
18 drawee and payment is refused by the drawee, is guilty of issuing a bad check.
19 The civil action referred to in this notice does not preclude the right to prosecute under the
20 criminal code of the state of Utah.
21 (Signed) _____________________________________________________________
22 Name of Holder: _______________________________________________________
23 Address of Holder: _____________________________________________________
24 Telephone Number: ____________________________________________________
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