Substitute Senate Bill No. 900
          Substitute Senate Bill No. 900

              PUBLIC ACT NO. 97-207


AN ACT CONCERNING  CREDITORS' COLLECTION PRACTICES
AND SERVICE CHARGES FOR DISHONORED CHECKS.


    Be  it  enacted  by  the  Senate  and House of
Representatives in General Assembly convened:
    Section  1. Section  36a-645  of  the  general
statutes  is  repealed   and   the   following  is
substituted in lieu thereof:
    As  used  in   sections  36a-645  to  36a-647,
inclusive, unless the context otherwise requires:
    (1) "Consumer debtor"  [or "debtor"] means any
natural  person  [to  whom  credit  for  personal,
family or household  purposes  has  been extended]
RESIDING IN THIS  STATE  WHO  OWES  A  DEBT  TO  A
CREDITOR.
    [(2) "Credit" means  the  right  granted  by a
creditor to a  consumer debtor to defer payment of
a  debt, incur  debt  and  defer  its  payment  or
purchase property or  services  and  defer payment
thereof.
    (3)] (2) "Creditor"  means  any person [who in
the ordinary course  of business extends credit to
a consumer debtor  residing in this state] TO WHOM
A DEBT IS  OWED BY A CONSUMER DEBTOR AND SUCH DEBT
RESULTS  FROM  A   TRANSACTION  OCCURRING  IN  THE
ORDINARY  COURSE  OF   SUCH   PERSON'S   BUSINESS.
"CREDITOR" SHALL NOT INCLUDE A CONSUMER COLLECTION
AGENCY, AS DEFINED  IN  SECTION  36a-800,  OR  ANY
DEPARTMENT OR AGENCY  OF  THE  UNITED STATES, THIS
STATE,  ANY  OTHER   STATE,   OR   ANY   POLITICAL
SUBDIVISION THEREOF.
    [(4)] (3) "Debt"  means an obligation [owed by
a  consumer  debtor  to  a  creditor]  OR  ALLEGED
OBLIGATION ARISING OUT  OF  A TRANSACTION IN WHICH
THE MONEY, PROPERTY,  GOODS  OR SERVICES WHICH ARE
THE SUBJECT OF  THE  TRANSACTION ARE FOR PERSONAL,
FAMILY OR HOUSEHOLD  PURPOSES, WHETHER OR NOT SUCH
OBLIGATION HAS BEEN REDUCED TO JUDGMENT.
    Sec.  2.  Section   52-565a   of  the  general
statutes  is  repealed   and   the   following  is
substituted in lieu thereof:
    (a) A drawer  negotiating a check who knows or
should know that  payment  of  such  check will be
refused by the  drawee  bank  either  because  the
drawer has no  account  with  such bank or because
the drawer has  insufficient funds on deposit with
such  bank  shall  be  liable  to  the  payee  for
damages, in addition  to  the  face  amount of the
check, provided the payee has presented such check
for  payment, the  check  is  dishonored  and  the
drawer fails to  pay the face amount of such check
within thirty days  following  the date of mailing
by the payee  of  the  second  written  demand for
payment as provided  in  subsection  (f)  of  this
section.
    (b) In the  case  of  a  drawer  negotiating a
check who knows  or  should  know  that payment of
such check will  be  refused  by  the  drawee bank
because the drawer  has no account with such bank,
such  damages  shall   be   in  an  amount  to  be
determined  by  the   court   in   light   of  the
circumstances, but in  no  event shall such amount
be greater than  the  face  amount of the check or
seven hundred fifty dollars, whichever is less.
    (c) In the  case  of  a  drawer  negotiating a
check who knows  or  should  know  that payment of
such check will  be  refused  by  the  drawee bank
because  the  drawer  has  insufficient  funds  on
deposit with such  bank,  such damages shall be in
an amount to  be  determined by the court in light
of the circumstances,  but  in no event shall such
amount be greater  than  the  face  amount  of the
check or four hundred dollars, whichever is less.
    (d) The drawer  shall  not  be  liable  to the
payee for the damages provided for by this section
if: (1) The  drawer gave such check as payment for
residential service supplied  by  a gas, electric,
steam, telephone or  water utility; (2) the drawer
gave such check  as  payment  for  the  rental  of
residential premises; or  (3) the drawer gave such
check as repayment of all, or a portion of, a debt
secured  by  collateral   which   the   payee  has
repossessed.
    (e) The damages  provided  for in this section
shall  be  available  only  to  those  persons  or
entities which post  or otherwise give conspicuous
notice to the  public  of the damages which may be
imposed  pursuant to  this  section.  Such  notice
shall set forth:  (1)  The  damages  that  may  be
imposed if a  check is dishonored; (2) the section
of the general  statutes authorizing imposition of
such damages; and (3) that criminal penalties also
may apply.
    (f) The first  written  demand  for payment on
the  dishonored  check   shall   be  in  the  form
prescribed by subsection  (g)  of this section and
shall be sent to the drawer's last-known residence
address or last-known  place  of business by first
class mail and  by  certified  mail return receipt
requested with delivery  restricted to the drawer,
on or after  the  date  the  payee received notice
that such check  had  been  dishonored. The second
written demand for payment on the dishonored check
shall be in  the form prescribed by subsection (g)
of this section and shall be sent to the drawer at
the  drawer's  last-known   residence  address  or
last-known place of  business  by first class mail
on or after  the  fifteenth day following the date
the first written  demand for payment was received
by the drawer.
    (g) The written  demands  for payment required
by subsection (f) of this section shall be printed
in at least  ten-point  type  in  both English and
Spanish and shall  include  the following: (1) The
name and last-known address of the drawer; (2) the
amount and date  of  the dishonored check; (3) the
bank upon which  the check was drawn; (4) the name
of  the  payee;  (5)  the  reason  the  check  was
dishonored;  (6)  the  address  to  which  payment
should be delivered;  (7)  an  explanation  of the
damages which may  be  imposed  pursuant  to  this
section in the  event  the drawer fails to pay the
face  amount of  the  dishonored  check;  and  (8)
whether the notice constitutes the first or second
demand for payment.
    (h) The penalties provided for in this section
shall not apply to any check for which payment has
been stopped by  the  drawer or to any check where
the drawer has  raised  a  reasonable defense with
respect to the validity of the underlying debt.
    (i)  NOTWITHSTANDING THE  PROVISIONS  OF  THIS
SECTION, IN THE  CASE OF A DRAWER WHO NEGOTIATES A
CHECK  WHICH  IS  DISHONORED,  THE  PAYEE  OR  ITS
ASSIGNEE MAY IMPOSE ON THE DRAWER A SERVICE CHARGE
OF UP TO TWENTY DOLLARS, PROVIDED, NO SUCH SERVICE
CHARGE  MAY BE  IMPOSED  IF  (1)  THE  DRAWER  HAS
STOPPED PAYMENT ON  THE  CHECK,  (2) THE CHECK WAS
STOLEN, OR (3)  THE DRAWER HAS RAISED A REASONABLE
DEFENSE  WITH  RESPECT  TO  THE  VALIDITY  OF  THE
UNDERLYING DEBT. THE  DRAWER  SHALL  NOT BE LIABLE
UNDER  THIS SUBSECTION  FOR  MORE  THAN  ONE  SUCH
SERVICE CHARGE FOR EACH DISHONORED CHECK.

Approved June 24, 1997