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S.B. 180 Enrolled
AN ACT RELATING TO FINANCIAL INSTITUTIONS; INCREASING THE DISHONORED
CHECK SERVICE CHARGE FOR MERCHANTS OR SERVICE PROVIDERS; AND
MAKING TECHNICAL CORRECTIONS.
This act affects sections of Utah Code Annotated 1953 as follows:
AMENDS:
7-15-1, as last amended by Chapters 52 and 128, Laws of Utah 1988
7-15-2, as last amended by Chapters 52 and 128, Laws of Utah 1988
Be it enacted by the Legislature of the state of Utah:
Section 1. Section 7-15-1 is amended to read:
7-15-1. Civil liability of issuer -- Notice of action -- Collection costs.
(1) Any person who makes, draws, signs, or issues any check, draft, order, or other
instrument upon any depository institution, whether as corporate agent or otherwise, for the
purpose of obtaining from any person, firm, partnership, or corporation any money, merchandise,
property, or other thing of value or paying for any service, wages, salary, or rent is liable to the
holder of the check, draft, order, or other instrument if:
(a) the check, draft, order, or other instrument:
(i) is not honored upon presentment; and
(ii) is marked "refer to maker"; or
(b) the account upon which the check, draft, order, or other instrument has been made or
drawn:
(i) does not exist[
(ii) has been closed[
(iii) does not have sufficient funds or sufficient credit for payment in full of the check,
draft, or other instrument.
(2) (a) The holder of the check, draft, order, or other instrument [
dishonored may:
(i) give written or verbal notice of dishonor to the person making, drawing, signing, or
issuing the check, draft, order, or other instrument; and [
(ii) impose a service charge that may not exceed [
(b) Notwithstanding Subsection (2)(a), a holder of a check, draft, order, or other instrument
that has been dishonored may not charge the service charge permitted under Subsection (2)(a) if:
(i) the holder redeposits the check, draft, order, or other instrument; and
(ii) that check, draft, order, or other instrument is honored.
(3) Prior to filing an action based upon this section, the holder of a dishonored check, draft,
order, or other instrument shall give the person making, drawing, signing, or issuing the dishonored
check, draft, order, or other instrument written notice of intent to file civil action, allowing the
person seven days from the date on which the notice was mailed to tender payment in full, plus the
service charge imposed for the dishonored check, draft, order, or other instrument.
[
order, or other instrument is liable to the holder for:
(a) the amount of the check, draft, order, or other instrument;
(b) interest; and
(c) all costs of collection, including all court costs and reasonable attorneys' fees.
[
approved by the court, for time expended if the collection is pursued personally by the holder and
not through an agent.
Section 2. Section 7-15-2 is amended to read:
7-15-2. Notice -- Form.
(1) (a) "Notice" means notice given to the person making, drawing, or issuing the check,
draft, order, or other instrument either in person or in writing.
(b) A written notice is conclusively presumed to have been given when properly deposited
in the United States mails, postage prepaid, by certified or registered mail, return receipt requested,
and addressed to the signer at [
other instrument or at [
(2) Written notice as applied in Subsection 7-15-1[
following form:
Date: ____
To: _____
You are hereby notified that the check(s) described below issued by you has (have) been
returned to us unpaid:
Instrument date: ____
Instrument number: ____
Originating institution: ____
Amount: ____
Reason for dishonor (marked on instrument): ____
This instrument, together with a service charge of [
within seven days from the date of this notice in accordance with Section 7-15-1, Utah Code
Annotated [
owing together with [
collection as provided by law.
In addition, the criminal code provides in Section 76-6-505, Utah Code Annotated [
that any person who issues or passes a check for the payment of money, for the purpose of obtaining
from any person, firm, partnership, or corporation, any money, property, or other thing of value or
paying for any services, wages, salary, labor, or rent, knowing it will not be paid by the drawee and
payment is refused by the drawee, is guilty of issuing a bad check.
The civil action referred to in this notice does not preclude the right to prosecute under the
criminal code of the state of Utah.
(Signed) _____________________________________________________________
Name of Holder: _______________________________________________________
Address of Holder: _____________________________________________________
Telephone Number: ____________________________________________________
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