Definitions

• The "drawer" is the person the check is from. The "payee" is the person the check is to. "Statutory penalty" is an amount three times the amount the check was written for (this amount must be at least $100, but won't exceed $1,500) minus any payments the drawer has already made.
  
  

Features

• Once a payee determines a check has bounced, the drawer is expected to pay the amount the check was written for plus the service charges (up to $25 for one check, $35 for additional checks) and costs to request payment. The drawer has 30 days to do make payment. After this, the drawer will be required to pay the amount the check was written for plus the statutory penalty. If the drawer pays off a portion of the amount of the check but 30 days elapse before full payment is made, the statutory penalty is calculated on the remaining amount owed.
  
  

Considerations

• The drawer doesn't have to pay the service charges if the bank is at fault for the bounced check either from clerical error or from not transferring funds to the checking account on the expected date. If the drawer has already paid a service charge for the bounced check, he or she is not required to pay another service charge to the payee.