What costs am I liable for if I write a bad check?
Question Details:
I know I need to pay; I wrote a bad check for $35 to a gas station. They sent me notice 2 months ago. Now I received a notice from an attorney that I must pay the $35 check, $35 fee, and a $2000 service charge. Can they legally charge a $2000 service charge?
I am glad that I saw this question as laws are different in each state and SJZ probably should not have answered this question. The Indiana Code has two provisions that apply. However, most collectors make a claim based on the following as it provides them with a higher recovery than the other appropriate code section.
Offenses against property; recovery of damages, costs, and attorney's fee
Sec. 1. If a person suffers a pecuniary loss as a result of a violation of IC 35-43, IC 35-42-3-3, IC 35-42-3-4, or IC 35-45-9, the person may bring a civil action against the person who caused the loss for the following:
(1) An amount not to exceed three (3) times the actual damages of the person suffering the loss.
(2) The costs of the action.
(3) A reasonable attorney's fee.
(4) Actual travel expenses that are not otherwise reimbursed under subdivisions (1) through (3) and are incurred by the person suffering loss to:
(A) have the person suffering loss or an employee or agent of that person file papers and attend court proceedings related to the recovery of a judgment under this chapter; or
(B) provide witnesses to testify in court proceedings related to the recovery of a judgment under this chapter.
(5) A reasonable amount to compensate the person suffering loss for time used to:
(A) file papers and attend court proceedings related to the recovery of a judgment under this chapter; or
(B) travel to and from activities described in clause (A).
(6) Actual direct and indirect expenses incurred by the person suffering loss to compensate employees and agents for time used to:
(A) file papers and attend court proceedings related to the recovery of a judgment under this chapter; or
(B) travel to and from activities described in clause (A).
(7) All other reasonable costs of collection.
As added by P.L.1-1998, SEC.19
There is an irrebuttable presumption that the minimum damage that has been incurred is $100, so therefore, in your instance, they are entitled to $300, and a reasonable attorneys fee. It seems to me, that that there are $70 in damages that get kicked up to $100 x 3 plus a reasonable attorneys fee. $2000 for a collection letter does not sound too reasonable to me and is probably unconscionable. Based on the information provided, it does not sound as if a suit has been filed, so most of the other costs allowed would not apply. I would be interested in seeing that lawyer's letter.
The only way they could charge any service charge for a bad check (as opposed to simply passing on a direct cost, like a bad check fee, caused by the bad check) would be if there was some notice (e.g. on the gas pumps) that bad checks are subject to a service charge. Even they had such a notice, a $2,000 charge would almost certainly be something you could fight as unconsciouably high. You should inform the gas station and the attorney that you will report them to the Attorney General's Office and the office of the court state system that regulates attorneys if they persist in trying to collect a $2,000 service charge. Indicate that you will make good the bad check and also pay a reasonable fee, such as thee $35 charge.
