Recently, someone asked a question on Avvo.com – where I am a very active contributor – that I wanted to share with my readers here. Briefly, the person asked whether they would get thrown in jail for defaulting on a payday loan. Apparently, they got a call from a debt collector demanding payment. The collector threatened that if the consumer did not pay, they would be prosecuted for check fraud.
I know from many people that call me, this is not an unusal threat. So, I want to make sure the record is clear.
What I answered on Avvo was that defaulting on a payday loan is a civil matter. It is not check fraud, and you cannot be thrown in jail. Therefore, if a collector makes this threat, it is the collector that is acting illegally; and if you have been threatened, your likely have a cause of action against the collector. You should defnitely consult with a consumer lawyer as a result.
What I didn’t detail on Avvo, but what I want you to know here on my website, is: Under Ohio law, the only way that you can be guilty of passing a bad check is if you know the check will be dishonored when you write pass it. In order words, you have to have the intention to defraud the recipient. I have copied the current law for your reference:
O.R.C. 2913.11 Passing bad checks
(A) As used in this section:
(1) “Check” includes any form of debit from a demand deposit account, including, but not limited to any of the following:
(a) A check, bill of exchange, draft, order of withdrawal, or similar negotiable or non-negotiable instrument;
(b) An electronic check, electronic transaction, debit card transaction, check card transaction, substitute check, web check, or any form of automated clearing house transaction.
(2) “Issue a check” means causing any form of debit from a demand deposit account.
(B) No person, with purpose to defraud, shall issue or transfer or cause to be issued or transferred a check or other negotiable instrument, knowing that it will be dishonored or knowing that a person has ordered or will order stop payment on the check or other negotiable instrument.
(C) For purposes of this section, a person who issues or transfers a check or other negotiable instrument is presumed to know that it will be dishonored if either of the following occurs:
(1) The drawer had no account with the drawee at the time of issue or the stated date, whichever is later;
(2) The check or other negotiable instrument was properly refused payment for insufficient funds upon presentment within thirty days after issue or the stated date, whichever is later, and the liability of the drawer, indorser, or any party who may be liable thereon is not discharged by payment or satisfaction within ten days after receiving notice of dishonor.
(D) For purposes of this section, a person who issues or transfers a check, bill of exchange, or other draft is presumed to have the purpose to defraud if the drawer fails to comply with section 1349.16 of the Revised Code by doing any of the following when opening a checking account intended for personal, family, or household purposes at a financial institution:
(1) Falsely stating that the drawer has not been issued a valid driver’s or commercial driver’s license or identification card issued under section 4507.50 of the Revised Code;
(2) Furnishing such license or card, or another identification document that contains false information;
(3) Making a false statement with respect to the drawer’s current address or any additional relevant information reasonably required by the financial institution.
(E) In determining the value of the payment for purposes of division (F) of this section, the court may aggregate all checks and other negotiable instruments that the offender issued or transferred or caused to be issued or transferred in violation of division (A) of this section within a period of one hundred eighty consecutive days.
(F) Whoever violates this section is guilty of passing bad checks. Except as otherwise provided in this division, passing bad checks is a misdemeanor of the first degree. If the check or checks or other negotiable instrument or instruments are issued or transferred to a single vendor or single other person for the payment of one thousand dollars or more but less than seven thousand five hundred dollars or if the check or checks or other negotiable instrument or instruments are issued or transferred to multiple vendors or persons for the payment of one thousand five hundred dollars or more but less than seven thousand five hundred dollars, passing bad checks is a felony of the fifth degree. If the check or checks or other negotiable instrument or instruments are for the payment of seven thousand five hundred dollars or more but less than one hundred fifty thousand dollars, passing bad checks is a felony of the fourth degree. If the check or checks or other negotiable instrument or instruments are for the payment of one hundred fifty thousand dollars or more, passing bad checks is a felony of the third degree.