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Thread: Bad Checks

  1. #1
    Join Date
    Oct 2003
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    Rockwall Texas
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    Default Bad Checks

    I've only had a few during my time in business but I know when it happens you can't but take it personally.

    I have had a bad check on this one man for about 2 years now. None of the information on his check has been much help in locating him. The address listed on the check was a prior. The bank won't tell you nothing.

    Anywho, I was about ready to just shred the thing one day last week but didn't for some reason.

    Last night this same guy calls and tells me his brother is buying a home and he was calling to see if I was still in business.

    He wanted to refer his brother to me as he was looking for an inspector.

    I told him, give me your address and I'll mail you some of my cards to give to him and I'll throw in a 20.00 coupon for him too. This guy just blurts it out as if I didn't remember his bad check.

    Well, I just turned it in this morning to the DA as that was all they were needing to track him down for the Hot Check.

    Something else another inspector here told me he does is when the buyer is there and he has "bad feeling" about their check, he actually takes a quick picture of the license plate on the vehicle they arrived in. He says its actually helped him track down persons who have given him a bad check.

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  2. #2
    Join Date
    Mar 2007
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    Spring City/Surrounding Philadelphia area
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    Default Re: Bad Checks

    Something I have learned from my one and still outstanding bank check experience is to take notice of the series number on the check. After the check bounced, I took notice that the check number was 101 which is typically the first in a series of checks. The bank teller at the bank where the check was drawn did at least let me know that no checks were ever cashed on the account and it was only being used for debit card activity.

    While I know this is not in itself indicative of a check that will bounce, it is a possible warning sign.

    Also, before you ever think about depositing an amount of money into a deadbeat's bank account for the purposes of getting the check to clear at your bank, see how long it takes your bank to attempt to extract the funds once you deposit the check. My bank takes anywhere from 7-10 days to collect after I deposit the check which is far too long and could allow anything to happen. My next plan is to look into opening an account at the deadbeats bank. If they can say that the check will clear the same day with funds in the account, I will open an account and close it as soon as the check clears.


  3. #3
    Join Date
    Mar 2007
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    Default Re: Bad Checks

    Nick you should be able to present the check at the bank the check is written on, not your bank or account. That way there is no way any fees, etc. from a returned check show up in your account. Be there in person and get cash directly from their bank, lest you get screwed again.

    Jim Luttrall
    www.MrInspector.net
    Dallas, Texas

  4. #4
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    Default Re: Bad Checks

    Jim, the check was unfortunately made payable to my business and not me personally. The check can only be deposited.


  5. #5
    Join Date
    Mar 2007
    Location
    Dallas, Texas
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    Default Re: Bad Checks

    I mark all of mine with a stamp of the company name and "For deposit only". So I understand the dilemma.
    If not marked as deposit only, you might take a DBA or other legal document to the bank as proof of being an officer and representative of the company and try... Just a thought.
    Good Luck!

    Jim Luttrall
    www.MrInspector.net
    Dallas, Texas

  6. #6
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    Mar 2007
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    Oregon
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    Default Re: Bad Checks

    In Oregon if/when someone writes a bad check they are liable for 3X the amount. I have a close friend in the information business who handles all of my collections for me. I'll give a brief description below but basically I almost get excited when someone passes me a bad check or tries to skip out on an invoice.

    For a bad check:

    You have to find an address... this can be done with a basic DMV search which is very cheap. The address they provide at the time of the inspection, the license number of their car, etc can be enough. Once you find them it's a matter of drawing up small claims court papers and having them served. If/when they fail to show you must follow through and file a judgement against them but you will eventually get your money. Unless they die or totally drop off the face of the earth. Once you get the judgement you can attache it to their credit report and/or any property they own so they have to pay you before the get any other credit or sell their property. Granted, it's a bit of a hassle to go through but once you learn about it, it's not too bad.

    For 'no pays' on an invoice -

    Basically the same course of action. I have really good luck with certified 10-day demand letter (forgot to mention this is good for the bad check too). This is an important step to collect all the fees you incur while chasing them down. In the letter you must basically state the facts; You did X job for X amount of money and you will pursue the matter in small claims court by X date if you do not receive X amount of money. I enclose a copy of the contract with their signature which usually does the trick. I have a mid-sized company and have to go down this road about 10 times a year. I usually have 1 or 2 that don't pay after the demand letter. They never show up for court so I get a judgement and just wait for them to call. Usually, it's from a car dealership when they need some credit. I stick to them for all the fees from minute one (DMV search to find them, fee to serve them, interest, etc, etc)

    It's really not too complicated but you have to learn how to do some things yourself. A couple calls to an information company can give you lots of answers. Actually, this stuff can usually be done from anywhere in the country so you don't even need someone local. One last caviat (Sorry, it's a home inspector thing) .... every state has different rules, laws, etc about information and how easy (which translates into $$) it is to find people.... I may have it good here in Oregon, I don't really know. But, like I mentioned I almost get excited when someone doesn't pay me


  7. #7
    Mark Nahrgang's Avatar
    Mark Nahrgang Guest

    Default Re: Bad Checks

    Matt,
    I don't know how entrepreneurial you are, but it sounds like you might have a future in collections for your fellow HI's if you pursued it.
    Mark


  8. #8
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    Default Re: Bad Checks

    Quote Originally Posted by Mark Nahrgang View Post
    Matt,
    I don't know how entrepreneurial you are, but it sounds like you might have a future in collections for your fellow HI's if you pursued it.
    Mark
    That's funny... after I wrote that post my mind was already churning. I'm sure there's a market out there. I learned most of the stuff from my friend. I used to work part time for him serving court documnets and stuff. No matter how bad an inspection ever goes that work is worse. Talk about people not happy to see you!

    The core of the legal system is really not that tough, particularly for items that can be handled in small claims court (usually under $5,000). The lawyers would love for to believe otherwise... so we have to pay them for everything.


  9. #9
    Travis Grubbs's Avatar
    Travis Grubbs Guest

    Default Re: Bad Checks

    Nick:

    I was surprised when I read your statement: "...the check was unfortunately made payable to my business and not me personally. The check can only be deposited."

    Are you really sure that this applies to "returned checks"? In the mid 80's I worked in retail, where bad checks were too routine. I frequently took checks stamped "return", with my stores "for deposit only" stamp on the back, and redeemed them at the check writers bank. In the late 80's to mid 90's I worked in lending and collections. When I discovered that a returned check was good, I frequently sent one of my employees to redeem it at the bank it was drawn, again with my companies "for deposit only" stamp on the back.

    Since becoming a home inspector (1994) I have only had two returned checks. I can remember that at least one of them was drawn on a local bank, where I presented it in person, and the bank cashed it. Again it was marked "for depsosit only" in my companies account.

    I have never had a problem getting a returned check redeemed if the money was in the account.

    Travis


  10. #10
    Join Date
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    Default Re: Bad Checks

    Unfortunately what I stated is true in my case Travis. The bank that issued the check said they will not cash a check made out to a business name. Even if sufficient funds were in the account, all I could do is attempt to deposit it at my bank again and hope that the money is still there when they go to extract the funds 7-10 days later.

    I think tomorrow I'll be stopping by the bank where the deadbeat has his account.


  11. #11
    Join Date
    Mar 2007
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    Ormond Beach, Florida
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    Default Re: Bad Checks

    Nick,

    It's simple, play by their rules ...

    Stop by that bank, put $100 in and 'open an account', deposit the check (making sure it is good first), then withdraw the amount of that check, then withdraw the rest of you money and close your account.

    I really suspect that, if you explain that to the bank, the bank will say 'To h$ll with rules and regulations, *it will cost us less* if we just cash the check' - providing that the check is good.

    Jerry Peck, Construction / Litigation Consultant
    Construction Litigation Consultants, LLC ( www.ConstructionLitigationConsultants.com )
    www.AskCodeMan.com

  12. #12
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    Default Re: Bad Checks

    That's the direction I'm leaning Jerry. I have gotten the runaround from the county with jurisdiction when I tried to pursue small claims court and then a private criminal complaint. Every office I was told to call said I needed to talk to somebody else so I have no faith in any of them helping me reach a resoluation. It's in my hands now to get what I can from this slug and then close the book on it.


  13. #13
    Join Date
    Mar 2007
    Location
    Columbus GA
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    Default Re: Bad Checks

    When the check is made payable to a company the bank will not cash it, but the bank will give you a bank certified check for it. Now you have a check from the bank and you can deposit it. Cost is usually $10.

    ' correct a wise man and you gain a friend... correct a fool and he'll bloody your nose'.

  14. #14
    James Duffin's Avatar
    James Duffin Guest

    Default Re: Bad Checks

    I have a case for a bad check in small claims court July 2. The check is for $300 but since I have tried to collect it with two certified letters I can get the amount of the check plus triple damages up to $500 plus bank fees and court cost. My claim is for $835 plus $85 court cost. The DA asst told me that they will issue a criminal warrant if they do not pay. I'll let you know the results after July 2.


  15. #15
    Travis Grubbs's Avatar
    Travis Grubbs Guest

    Default Re: Bad Checks

    James:

    Good luck! I hope you get the full amount. I have been fortuanate to have had so few bad checks, and have successfully (and easily) collected each one.

    Travis


  16. #16
    Join Date
    Mar 2007
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    Oregon
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    Default Re: Bad Checks

    Quote Originally Posted by James Duffin View Post
    I have a case for a bad check in small claims court July 2. The check is for $300 but since I have tried to collect it with two certified letters I can get the amount of the check plus triple damages up to $500 plus bank fees and court cost. My claim is for $835 plus $85 court cost. The DA asst told me that they will issue a criminal warrant if they do not pay. I'll let you know the results after July 2.
    If they don't show and you win you may have to file for a judgement and then pay a small fee to trascript it. All that basically means is that they attach it to their credit report.

    In my area the ID thefts and related things have gotten so out of hand that the DA's don't have time to chase them down. That is the criminal end of it. When you file for the judgement that is the civil end. In fact, a lot of banks in my area no longer even bother to file criminal charges for bad checks since the DA's won't follow through. The banks just go after the people in civil court... Your area might be different... Just ask lots of questions and don't assume just because the court tells you something that it's the ONLY option.


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