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statutes is repealed and the following is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statutes is repealed and the following is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