Senate Bill No. 214
               Senate Bill No. 214

               PUBLIC ACT NO. 98-77


AN ACT CONCERNING BAD CHECKS.


    Be  it  enacted  by  the  Senate  and House of
Representatives in General Assembly convened:
    Section 52-565a of  the  general  statutes, as
amended by section  2  of  public  act  97-207, 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repealed and the  following is substituted in lieu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] DEMAND 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;  AND
(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 May 22, 1998