Fee Businesses can charge for Return Checks

Posted By: Anonymous

Fee Businesses can charge for Return Checks - 07/01/03 08:01 PM

Today I had one of my business customers contact me trying to find out if there is a maximum fee a business can charge a customer for a returned check. I did not know, and could not find it anywhere. Can someone help me out?
Posted By: Julie

Re: Fee Businesses can charge for Return Checks - 07/01/03 09:13 PM

Try this:
http://www.in.gov/dfi/consumer/indiana_dishonored_checks_and_dr.htm##c
Posted By: Dan Persfull

Re: Fee Businesses can charge for Return Checks - 07/01/03 09:16 PM

D, I've searched several references and I am also unable to come up with a cite that governs that. It's unlikely, but it may be possible that's not regulated.

If you come up with something I would appreciate you sharing it with us.
Posted By: Dan Persfull

Re: Fee Businesses can charge for Return Checks - 07/01/03 09:23 PM

Quote:

Try this:
http://www.in.gov/dfi/consumer/indiana_dishonored_checks_and_dr.htm##c




Julie, I saw this document but this document appears to deal mostly with what the penalities would be if the check has to be "collected". I did not see anything concerning the amount a "merchant" may charge. Did I miss it?
Posted By: Julie

Re: Fee Businesses can charge for Return Checks - 07/02/03 04:06 PM

OK...how about IC 26-1-3.1-502.5

http://www.ai.org/legislative/ic/code/title26/ar1/ch3.1.html
Posted By: Dan Persfull

Re: Fee Businesses can charge for Return Checks - 07/02/03 04:16 PM

Good work Julie. I would never have found it, I kept searching on return check fees/charges. I would never have thought to search under "surcharge."

Thanks for the information.
Posted By: Anonymous

Re: Fee Businesses can charge for Return Checks - 07/02/03 09:02 PM

Thanks for the Surcharge site to refer to. I read through it but am still not sure. How do you interpret it. It says $20 maximum plus an amount equal to the actual charge by the depository instiution for each returned check. I am not sure what that is saying. Can someone help me out.
Posted By: Dan Persfull

Re: Fee Businesses can charge for Return Checks - 07/02/03 09:13 PM

The way I'm reading that is they can charge $20 plus the NSF fee the bank charges them. So, if the bank charges a $25 NSF fee, the holder of the check can charge $45.

I haven't had time to do any further research on this, but I'm wondering if this fee is adjusted every 2 years like the loan fees/amounts are?

I also have been unable to locate a cite that "governs" what the bank can charge for a NSF on the deposit side. The lending side is limited to $20 and that fee is not adjusted.

Do either of you have information on the bank's NSF charge limitation, if any? I don't normally deal with deposits so it takes be longer to track these down.
Posted By: Dan Persfull

Re: Fee Businesses can charge for Return Checks - 07/03/03 09:58 PM

From Mark Tarpey at the IN DFI:

We show IC 26-1-3 as being repealed several years ago. Depository institutions can charge NSF fees as part of their basic checking account/deposit agreement in any amount contracted for under IC 28-1-1-3.1. See also IC 26-2-7 and IC 34-4-30-1.

On a loan/retail sales consumer credit agreement all "creditors" including banks are limited to a maximum NSF fee as outlined in IC 24-4.5-2-202(1)(d) for retail sales and IC 24-4.5-3-202(1)(f) for loans in the amount not to exceed $20.

Merchants who accept checks that are returned insufficient are governed by IC 35-43-5-5 which provides for a charge that was the greater of $20 or 5%, but not more than $250. This was just changed by the legislature as of 7/1/03 to be $25. See above reference to other IC sections for additional remedies.