Businesses forced to change policies for bad checks

Lois Burgess, administrator of Cape Girardeau County's Bad Check Unit, thought the number of bounced checks arriving in her office had dropped.

Then she checked the figures.

Between Jan. 1 and March 31 this year, her office processed 688 bad checks. Most were the result of insufficient funds; a few were written on closed accounts. In the first quarter of 2007, her office processed 610 bad checks.

"So we did have a few more this year as opposed to last year," she said. "However, most of those came in January. February and March were basically the same as last year."

Burgess said the first quarter of 2006 was much worse. She processed 858 insufficient-fund checks.

"We used to average 400 and 500 bad checks a month. In February, we had 161 for the whole month. We're way down from what we used to be. Maybe more people are using their debit cards," she said.

Burgess said she saw a few larger checks this year, for contractors or building supplies, which "made me wonder if maybe some people were having problems."

Burgess's counterpart in Scott County, Paula Bouge, said her office has seen almost twice the number of bad checks over the first quarter of 2007.

This year, she processed 744 checks with a total face value of $71,000. During the first quarter of 2007, her records show 402 bad checks, written for $38,000.

She said January was her busiest month.

"I think that was due to Christmas and I think it's seasonal," said Bouge, office manager and coordinator for felonies and bad check charges for Scott County's prosecuting attorney's office. "But Christmas is hard for people. I think they borrow money and write checks to buy food and buy presents."

Large stores have departments devoted to handling bad checks. But independent merchants must decide how to handle it themselves.

Judith Golightly, who works at Pastimes Antiques, said she's seen two bounced checks in the last year, one for $1,000.

"We went to the prosecuting attorney's office," she said. The store didn't recover the money, but "we got all our stuff back."

Most shops taking checks require a phone number and driver's license number. Golightly said she and others at her shop will call the bank if a check is for a large amount, but sometimes people write checks after bank hours. If a check doesn't clear, she said, her boss will contact the customer directly. At times the shop has taken one intermediate step before going to the prosecutor's office. A note including the name of the person who wrote the bad check is posted near the store's cash register.

Jason Longwith hasn't used that tactic with the two bad check he's received since opening Brown's Shoe Fit Company two years ago.

"I tried to contact them first," he said. "In both cases, they came right in and paid."

Some small business owners, Bouge and Burgess said, automatically ship the bad checks received each month to the county prosecutors' offices.

"We can prosecute a check that is insufficient for up to a year, so some merchants hold onto a check, trying to collect it from a customer. They might hold it six months before sending it to us," she said.

Bouge said state law requires the county to give the check writer a 10-day notice before a criminal action is filed.

Burgess said the county fees for bad checks are $30 for check under $100, $55 for $100 to $250 and $80 for any bad check over $250. "They do not necessarily have to go to court for these fees," Burgess said.

The county fine, along with bank fees and merchant penalties ranging from $25 to $30 or more, could mean a $10 bounced check costs the person who wrote it close to $90. Writing bad checks is against the law.

From each county fine, $5 is paid to the Missouri Office of Prosecutorial Service, which was established to improve the efficiency of prosecuting misdemeanors and traffic cases.

According to the most recent MOPS guidelines, published in 2004, passing a bad check in a misdemeanor with a maximum punishment of up to a year in jail and $1,000. It becomes a felony if a check is written on a closed account or written for $500 or more. A felony conviction can deliver a $5,000 fine and up to five years in jail. State law allows prosecutors to group bad checks in 10-day increments, meaning if someone wrote a series of checks over that time totaling $500, that person could also be charged with a felony.

Karen Stephens, owner of Annie-Em's Gifts & Antiques, which opened in downtown Cape Girardeau in 2001, said she's never had a bad check from a client.

Neither has Gary G. Johnson, managing officer at Memories Made in Missouri.

But he expects merchants will see more this year. "It's inevitable in this economy," he said. "People will take more risks."

In October, 2005, Broussard's stopped accepting checks altogether. It eliminated the need to chase customers down for payment, said Samantha Frank, dining room manager. She said the office manager once drove to a customer's home to spare her from prosecution.

"Sixty to 70 percent of our customers were paying with debit cards or cash," Frank said. "With debit, we get paid instantly, instead of having to wait up to two weeks for payment."

Personally, Frank said, she's a big fan of checks. "I'm the check-writing queen," she said. "I would never write one at a restaurant, though."

She has never bounced a check. Frank keeps an eagle eye on her account balance, checking it twice daily and using her check register whenever possible.

"I know down to the penny what's in my account," she said.

pmcnichol@semissourian.com

335-6611, extension 127