BILL REQ. #:  H-0396.1 



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HOUSE BILL 1347
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State of Washington59th Legislature2005 Regular Session

By Representatives Lantz, Williams and Newhouse

Read first time 01/20/2005.   Referred to Committee on Judiciary.



     AN ACT Relating to dishonored checks; and amending RCW 62A.3-515, 62A.3-520, 62A.3-522, and 62A.3-525.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

Sec. 1   RCW 62A.3-515 and 2000 c 215 s 1 are each amended to read as follows:
     (a)(1) If a check as defined in RCW 62A.3-104 is dishonored by nonacceptance or nonpayment, the payee or person entitled to enforce the check under RCW 62A.3-301 may collect a reasonable handling fee for each instrument. If the check is not paid within fifteen days and after the person entitled to enforce the check or the person's agent sends a notice of dishonor as provided by RCW 62A.3-520 to the drawer at the drawer's last known address, and if the instrument does not provide for the payment of interest or collection costs and attorneys' fees, the drawer of the instrument is liable for payment of interest at the rate of twelve percent per annum from the date of dishonor, and cost of collection not to exceed forty dollars or the face amount of the check, whichever is less, payable to the person entitled to enforce the check. In addition, in the event of court action on the check, the court, after notice and the expiration of the fifteen days, shall award reasonable attorneys' fees, and three times the face amount of the check or three hundred dollars, whichever is less, as part of the damages payable to the person enforcing the check. This section does not apply to an instrument that is dishonored by reason of a justifiable stop payment order.
     (2) If a check as defined in RCW 62A.3-104 is dishonored by nonacceptance or nonpayment and the check is assigned or written to a collection agency as defined in RCW 19.16.100, the collection agency may collect a reasonable handling fee for each instrument. If the collection agency or its agent provides a notice of dishonor in the form provided in RCW 62A.3-520 to the drawer and the check amount plus the reasonable handling fee are not paid within thirty-three days after providing the notice of dishonor, then, unless the instrument otherwise provides, the drawer of the instrument is liable for payment of interest at the rate of twelve percent per annum from the date of dishonor, and a cost of collection of forty dollars or the face amount of the check, whichever is less, payable to the collection agency. In addition, in the event of court action on the check and after notice and the expiration of the thirty-three days, the court shall award reasonable attorneys' fees, and three times the face amount of the check or three hundred dollars, whichever is less, as part of the damages payable to the collection agency. This section does not apply to an instrument that is dishonored by reason of a justifiable stop payment order.
     (b)(1) Subsequent to the commencement of an action on the check (subsection (a)) but prior to the hearing, the defendant may tender to the plaintiff as satisfaction of the claim, an amount of money equal to the face amount of the check, a reasonable handling fee, accrued interest, collection costs equal to the face amount of the check not to exceed forty dollars, and the incurred court costs, service costs, and statutory attorneys' fees.
     (2) Nothing in this section precludes the right to commence action in a court under chapter 12.40 RCW for small claims.

Sec. 2   RCW 62A.3-520 and 1993 c 229 s 68 are each amended to read as follows:
     (1) The notice of dishonor shall be sent by mail to the drawer at the drawer's last known address, and the notice shall be substantially in the following form:


     NOTICE OF DISHONOR OF CHECK


     A check drawn by you and made payable by you to . . . . . . in the amount of . . . . . . has not been accepted for payment by . . . . . ., which is the drawee bank designated on your check. This check is dated . . . . . ., and it is numbered, No. . . . . . ..
     You are CAUTIONED that unless you pay the amount of this check within fifteen days after the date this letter is postmarked, you may very well have to pay the following additional amounts:
     (((1))) (a) Costs of collecting the amount of the check, including an attorney's fee which will be set by the court;
     (((2))) (b) Interest on the amount of the check which shall accrue at the rate of twelve percent per annum from the date of dishonor; and
     (((3))) (c) Three hundred dollars or three times the face amount of the check, whichever is less, by award of the court.
     You are also CAUTIONED that law enforcement agencies may be provided with a copy of this notice of dishonor and the check drawn by you for the possibility of proceeding with criminal charges if you do not pay the amount of this check within fifteen days after the date this letter is postmarked.
     You are advised to make your payment to . . . . . . at the following address: . . . . . . . . . .
     (2)(a) If a check is assigned or written to a collection agency as defined in RCW 19.16.100 and the collection agency or its agent provides a notice of dishonor, the notice of dishonor may be sent by mail to the drawer at the drawer's last known address. The drawer is conclusively presumed to have received the notice of dishonor not more than three days from the date it is mailed. The collection agency may, as an alternative to providing a notice in the form described in subsection (1) of this section, provide a notice in substantially the following form:

NOTICE OF DISHONOR OF CHECK


     A check drawn by you and made payable by you to . . . . . . in the amount of . . . . . . has not been accepted for payment by . . . . . ., which is the drawee bank designated on your check. This check is dated . . . . . ., and it is numbered, No. . . . . . ..
     You are CAUTIONED that unless you pay the amount of this check and a handling fee of . . . . . within thirty-three days after the date this letter is postmarked or personally delivered, you may very well have to pay the following additional amounts:
     (i) Costs of collecting the amount of the check in the lesser of the check amount or forty dollars, plus, in the event of legal action, court costs and attorneys' fees, which will be set by the court;
     (ii) Interest on the amount of the check which shall accrue at the rate of twelve percent per annum from the date of dishonor; and
     (iii) Three hundred dollars or three times the face amount of the check, whichever is less, by award of the court.
     You are also CAUTIONED that law enforcement agencies may be provided with a copy of this notice of dishonor and the check drawn by you for the possibility of proceeding with criminal charges if you do not pay the amount of this check within thirty-three days after the date this letter is postmarked.
     You are advised to make your payment of $. . . . . to . . . . . . at the following address: . . . . . . . . . .
     (b) The cautionary statement regarding law enforcement in (a) of this subsection need not be included in a notice of dishonor sent by a collection agency. However, if included and whether or not the collection agency regularly refers dishonored checks to law enforcement, the cautionary statement in (a) of this subsection shall not be construed as a threat to take any action not intended to be taken or that cannot legally be taken; nor shall it be construed to be harassing, oppressive, or abusive conduct; nor shall it be construed to be a false, deceptive, or misleading representation; nor shall it be construed to be unfair or unconscionable; nor shall it otherwise be construed to violate any law.

Sec. 3   RCW 62A.3-522 and 2000 c 215 s 2 are each amended to read as follows:
     (1) In addition to sending a notice of dishonor to the drawer of the check under RCW 62A.3-520, the person sending notice shall execute an affidavit certifying service of the notice by mail. The affidavit of service by mail must be attached to a copy of the notice of dishonor and must be substantially in the following form:


     AFFIDAVIT OF SERVICE BY MAIL


     I, . . . . . ., hereby certify that on the . . . . . . day of . . . . . ., 20. . ., a copy of the foregoing Notice was served on . . . . . . by mailing via the United States Postal Service, postage prepaid, at . . . . . ., Washington.
          Dated:               . . . . . . . . . . . . . . . .
                                   (Signature)

     (2)(a) The person enforcing ((the)) a check under RCW 62A.3-520(1) shall retain the affidavit with the check but shall file a copy of the affidavit with the clerk of the court in which an action on the check is commenced.
     (b) The person enforcing a check under RCW 62A.3-520(2) may retain the affidavit or may file the affidavit and check, or a true copy thereof, with the clerk of the court in which an action on the check is commenced as permitted by court rule or practice.

Sec. 4   RCW 62A.3-525 and 2000 c 215 s 3 are each amended to read as follows:
     (1) No interest, collection costs, and attorneys' fees, except handling fees, are recoverable on any dishonored check under the provisions of RCW 62A.3-515(a)(1) where a person entitled to such recovery or any agent, employee, or assign has demanded:
     (((1))) (a) Interest or collection costs in excess of that provided by RCW 62A.3-515(a)(1); or
     (((2))) (b) Interest or collection costs prior to the expiration of fifteen days after the mailing of notice of dishonor, as provided by RCW 62A.3-515(a)(1) and 62A.3-520(1); or
     (((3))) (c) Attorneys' fees either without having the fees set by the court, or prior to the expiration of fifteen days after the mailing of notice of dishonor, as provided by RCW 62A.3-515(a)(1) and 62A.3-520(1).
     (2) No interest, collection costs, and attorneys' fees, except handling fees, are recoverable on any dishonored check under the provisions of RCW 62A.3-515(a)(2) where a collection agency or its agent, employee, or assign has demanded:
     (a) Interest or collection costs in excess of that provided by RCW 62A.3-515(a)(2); or
     (b) Interest or collection costs prior to the expiration of thirty- three days after the serving or mailing of the notice of dishonor, as provided by RCW 62A.3-515(a)(2) or 62A.3-520(2); or
     (c) Attorneys' fees other than statutory attorneys' fees without having the fees set by the court, or any attorneys' fees prior to thirty-three days after the serving or mailing of the notice of dishonor, as provided by RCW 62A.3-515(a)(2) or 62A.3-520(2).

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