When a bank refuses payment on a check, the payee must pursue payment in some other form. In Arizona, state law guides the criminal prosecution of those who write bad checks, but each county has an early-intervention procedure for individuals and merchants who have been burned by a bouncing check. Before resorting to a criminal case, you may be able to recover the funds owed through one of these programs.
State Law on Bad Checks
If there was no intent to commit fraud, and the bad check resulted from an honest mistake, Arizona law allows that circumstance as a defense against any criminal charges. An individual charged with writing a bad check, for example, can defend himself by showing that the payee knew, or was notified, there were insufficient funds at the time the check was written. In addition, a check writer may show that an adjustment in the account by the bank resulted in an unexpected, lower balance, or that he made out a postdated check later covered by sufficient funds in the account, which shields him from any bad-check charges.
Classifications of the Crime
Arizona requires payees holding bad checks and seeking prosecution to issue a Notice of Dishonored Check or a Demand for Payment. This gives the check-writer 12 days -- plus five days for mailing if the notice is mailed -- to make the check good, including any added fees. If it comes to a criminal case, issuing a bad check in Arizona is a class 1 misdemeanor, which is the most serious misdemeanor by state law. On conviction, a class 1 brings a fine of up to $2,500 and up to six months in jail. If the check was made out for $5,000 or more, and goes unpaid, the Arizona statutes kick the case up to a class 6 felony charge, which brings a fine of up to $150,000 and a year's stay in jail. Under Arizona law, a bank is not required to honor a check more than six months old. State law also sets a statute of limitations on civil claims for "fraud or mistake" at three years, meaning the payee has three years from the date a check is dishonored by the bank to bring a lawsuit. Prosecutors have a one-year statute of limitations for misdemeanors, and seven years for class 6 felonies.
Bad Check Programs
In Maricopa, Pima and other Arizona counties, prosecutors sponsor bad check programs that streamline legal enforcement. In guidebooks designed for merchants and others who handle checks on a regular basis, the counties give basic instructions on the procedures, sample forms to use, contact numbers, and advice on how to prevent and handle bounced checks. Generally, the payee in this situation is responsible for first notification and then collection; if collection efforts fail and the 12-day deadline passes, the county attorney picks up the case, brings charges and collects the funds.
Arizona law defines passing a bad check as writing a check with knowledge that the account has insufficient funds to cover the check and all other checks outstanding on the account. Thus, simply making a math error or inadvertently miscalculating a bank balance won't merit criminal prosecution. Writing a check on a closed account, or signing someone else's name on an account that isn't your own, might bring some closer attention from the authorities.