Tuesday, July 21, 2009

Bouncing Checks...

Ian Ayers has an interesting piece on Freakonomics today about Antoine Walker being arrested for writing bad checks...


In the past, for writing bad checks to be a criminal offense, there has to be intent. Mr. Ayers notes that in Nevada, the law as written is a different, assuming intent to defraud if the author of the bad check does not make the check good in 5 days.

Mr. Ayers questions whether it this is fair or correct.

Under this provision, if you bounce a check and don’t make it good within five days, you are presumed to have intended to defraud the payee and can be subject to criminal punishment. This presumption is unconscionably broad. If you mistakenly thought that you had enough money in your account and then find that you do not, you can go to jail. I’ve bounced checks by mistake in the past, and this presumption scares the bejabbers out of me.
Like Mr. Ayers, the Commission has bounced a check (once), and the idea that it could be treated as a criminal act is scary.

At the same time, there is no law that requires consumers to use checking accounts, and the use of checks comes with the moral and legal responsibility to not write bad checks. This is one of the few times when the Commission has felt that Mr. Ayers is off track. Even though he makes a reasonable point in tying the Nevada legislation to the casino trade, that does not make it a bad change in the law.

If you write checks, you are responsible for making sure that there is enough money in the account to cover them.