Sunday, January 08, 2006

Write a Bad Check at Walmart and the DA will Getcha

Most District Attorney's Offices in the United States have a bad check program. The way it works is a business (or individual) turns over their bad paper to a program established by them and they collect the item, plus fees.

The difference between them and a collection agency is that if you don't pay, they will prosecute you.

Apparently Walmart, who had been using a lot of these DA programs -- wanted to consolidate their collection efforts -- and when they did; many DA's offices were not very happy. Apparently (for some of them) this is a significant source of revenue.

In the United States, it's necessary to prove "intent" to charge someone with a crime. That's (unless) you utilize the DA's check collection service.

Many larger corporations seem to prefer using collection agencies versus the local programs. Large corporations do business over wide geographic areas and it can be cumbersome to deal with check issues, County by County.

Kevin Murphy of the Kansas City Star did an article on this:

“Wal-Mart is the second-largest client that we serve in the prosecutor’s office.”Mike Sanders, Jackson County prosecutor

"When retail giant Wal-Mart decided recently to refer all deadbeat check writers to a collection agency, county prosecutors in Missouri and some other states winced.

Bad checks, it seems, are good business for some prosecutors and district attorneys, who collect fees from the check writers. Fees usually exceed the collection costs, meaning money is left over for all sorts of prosecution expenses.

Wal-Mart, the nation’s top retailer, is a top producer of bad-check cases. Its stores represent one-third to one-half of fees collected in some Missouri counties, and each case can bring fees of at least $25 to $75 to county tills. Such cases are less lucrative in Kansas because state law limits fees to $10 per check.

“Wal-Mart is the second-largest client that we serve in the prosecutor’s office,” said Mike Sanders, Jackson County prosecutor. The county collected about $43,481 in fees from Wal-Mart check writers in the first 11 months of 2005, Sanders said.

Wal-Mart’s decision not to refer cases to prosecutors has created so much opposition nationally that the company is re-evaluating its November decision to go entirely with a collection agency.
“In some states, prosecutors have come to rely on that type of income to fund a significant portion of their budgets,” said Paul Logli, an Illinois prosecutor who is president of the National District Attorneys Association. The money also funds educational programs to reduce check fraud, he said.

For the full story please read: Retailer will review policy.

In the past, I've dealt with some of these local programs and they are a great service for small businesses and small companies. Of course, they are only as efficient as the information they are given to collect. Unfortunately, with 9 million victims of identity theft a year, checks are often cashed with assumed identities and counterfeit identification.

Businesses that take checks are well advised to protect their assets by knowing who they are accepting checks from and training their employees to detect check fraud. Collection and or prosecution efforts are only effective if you can identify the person who passed the item.

The Federal Reserve System has an excellent training document for anyone unfamiliar with how to identify bad checks.

Walmart has been in the news lately regarding a lot of fraud issues. Here is a previous post, I wrote on that matter:

Walmart's Many Woes With Fraud Issues

1 comment:

prying1 said...

The Federal Reserve System link you gave was well worth the visit. I'm taking that one to work and spread it around to some business owners I know. Thanks - GBYAY - PRY -