2001-2002 Bill 3020: Checks, Dishonored; Delay of Collection Efforts Under Certain Conditions;

BIL: 3020

TYP: General Bill GB

INB: House

IND: 20010109

PSP: Taylor

SPO: Taylor

DDN: l:\council\bills\dka\3994mm01.doc

RBY: House

COM: Judiciary Committee 25 HJ

SUB: Checks, dishonored; delay of collection efforts under certain conditions; Consumer Affairs, Banks and Savings and Loan

HST:

Body Date Action Description Com Leg Involved

______

House 20010109 Introduced, read first time, 25 HJ

referred to Committee

------20001212 Scrivener's error corrected

House 20001206 Prefiled, referred to Committee 25 HJ

Versions of This Bill

Revised on 20001212

TXT:

A BILL

TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING SECTIONS 34-11-115 AND 37-5-118 BOTH SO AS TO PROVIDE FOR NOTICE OF DISHONOR AND FOR DELAY OR SUSPENSION OF COLLECTION EFFORTS IN CONNECTION WITH A CHECK SUBMITTED TO A CHECK RECOVERY SERVICE, IF THERE IS A REQUEST FOR CERTAIN INFORMATION OR NOTICE OF A WRONGFUL DISHONOR OR A BONA FIDE DISPUTE, AND TO PROVIDE FOR A FINE FOR NONCOMPLIANCE.

Be it enacted by the General Assembly of the State of South Carolina:

SECTION 1. 1. The 1976 Code is amended by adding:

“Section 34-11-115. (A) A holder of a check that has been dishonored by the drawee bank must give thirty days’ notice by mail to the drawer of the check before submitting the check to a check recovery service for collection.

(B) A check recovery service:

(1) may not undertake collection efforts until thirty days after receipt by the drawer of the notice described in subsection (A); and

(2) must suspend collection efforts until it provides the drawer proof of the dishonored check or name and address of the original holder if the drawer requests that information within thirty days of his receipt of the notice described in subsection (A).

(C)(1) A holder of a check that has been dishonored wrongfully or that is the subject of a bona fide dispute must give notice to the check recovery service within two business days of the holder’s receipt of notice that the dishonor was wrongful or that a bona fide dispute exists as to payment.

(2) Upon receipt by the check recovery service of the holder’s notice of wrongful dishonor or bona fide dispute, the check recovery service immediately must halt all collection efforts in connection with that check, including the immediate removal of the drawer’s identifying information from its collection system.

(D) Failure of a holder or a check recovery service, or both, to comply with this requirement is punishable by a fine of not less than one hundred dollars for each occurrence.”

SECTION 2. The 1976 Code is amended by adding:

“Section 37-5-118. (A) A creditor who is the holder of a check that has been dishonored by the drawee bank must give thirty days’ notice by mail to the drawer of the check before submitting the check to a check recovery service for collection.

(B) A check recovery service:

(1) may not undertake collection efforts until thirty days after receipt by the drawer of the notice described in subsection (A); and

(2) must suspend collection efforts until it provides the drawer proof of the dishonored check or name and address of the original creditor if the drawer requests that information within thirty days of his receipt of the notice described in subsection (A).

(C)(1) A creditor who is the holder of a check that has been dishonored wrongfully or that is the subject of a bona fide dispute must give notice to the check recovery service within two business days of the creditor’s receipt of notice that the dishonor was wrongful or that a bona fide dispute exists as to payment.

(2) Upon receipt by the check recovery service of the creditor’s notice of wrongful dishonor or bona fide dispute, the check recovery service immediately must halt all collection efforts in connection with that check, including the immediate removal of the drawer’s identifying information from its collection system.

(D) Failure of a creditor or a check recovery service, or both, to comply with this requirement is punishable by a fine of not less than one hundred dollars for each occurrence.”

SECTION 3. This act takes effect upon approval by the Governor.

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