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The civil provisions of the Illinois Deceptive Practices Act, 720 ILCS 5/17-1 (a criminal statute), govern situations where a defendant issues bad checks with intent to defraud. Section 5/17-1(B) provides:
(B) Bad checks.
A person commits a deceptive practice when:
(1) With intent to obtain control over property or to pay for property, labor or services of another,….he or she issues or delivers a check or other order upon a real or fictitious depository for the payment of money, knowing that it will not be paid by the depository. The [court] may infer that the defendant knows that the check or other order will not be paid by the depository and that the defendant has acted with intent to defraud when the defendant fails to have sufficient funds or credit with the depository when the check or other order is issued or delivered, or when such check or other order is presented for payment and dishonored on each of 2 occasions at least 7 days apart. In this paragraph (B)(1), “property” includes rental property (real or personal).
(2) He or she issues or delivers a check or other order upon a real or fictitious depository in an amount exceeding $150 in payment of an amount owed on any credit transaction for property, labor or services, or in payment of the entire amount owed on any credit transaction for property, labor or services, knowing that it will not be paid by the depository, and thereafter fails to provide funds or credit with the depository in the face amount of the check or order within 7 days of receiving actual notice from the depository or payee of the dishonor of the check or order.
The caselaw distills a civil bad check claim to the following elements: a plaintiff (the party to whom an NSF check was given) must show: (1) that defendant delivered a check to obtain services, labor and property of another, (2) that defendants knew the checks would not be honored, (3) that defendants acted with intent to defraud and (4) the defendants failed to pay on demand.
The corporate officer who signs a bad checks can also be individually liable under the Act. This is an offshoot of the active participation rule: a corporate officer is liable for torts in which he actively participates.
Once a bad check claimant shows these elements, the Deceptive Practices Act’s civil liability provisions kick in. Section 17-1(E) provides:
Civil liability. A person who issues a check or order to a payee in violation of paragraph (B)(1) and who fails to pay the amount of the check or order to the payee within 30 days following either delivery and acceptance by the addressee of a written demand both by certified mail and by first class mail to the person’s last known address or attempted delivery of a written demand sent both by certified mail and by first class mail to the person’s last known address and the demand by certified mail is returned to the sender with a notation that delivery was refused or unclaimed shall be liable to the payee….for, in addition to the amount owing upon such check or order, damages of treble the amount so owing, but in no case less than $100 nor more than $1,500, plus attorney’s fees and court costs.
An action under this subsection (E) may be brought in small claims court or in any other appropriate court. As part of the written demand required by this subsection (E), the plaintiff shall provide written notice to the defendant of the fact that prior to the hearing of any action under this subsection (E), the defendant may tender to the plaintiff and the plaintiff shall accept, as satisfaction of the claim, an amount of money equal to the sum of the amount of the check and the incurred court costs, including the cost of service of process, and attorney’s fees
So, if you are civilly prosecuting an NSF check case for a client, you should (a) be on the lookout for the check being returned twice in a 7-day period; and (b) send the 30-day demand by certified and regular mail. Once the 30-day period elapses, you can file suit in Law Division ($30K and higher), Muni ($10,000-$30,000) or Muni small claims (under $10,000) and recover the face amount of the check plus up to $1,500 for each returned check and attorneys’ fees and costs.
For the less litigious, there’s Section 3-806 of the Uniform Commercial Code (810 ILCS 5/3-806). This statute governs “non litigated” bad check collections. Under this section, the aggrieved party can recover the amount of the check, and the greater of $25 or reasonable costs, expenses, and attorneys’ fees incurred in collecting on the bad check. However, to recover more than $25, the check recipient must provide 30-days notice by certified mail to the party that delivered the bad check and give that party an opportunity to cure by making good on the check.