A customer was denied credit and told they were COD. They picked up the product and gave a check to the clerk. The check came back NSF. Is there any legal leverage that I can use against this customer?

You can certainly proceed against the debtor for the unpaid amount. In fact, depending on the state the debtor is located in, you may be able to sue for more than the amount of the NSF check, should suit become necessary.

Another option available to you is to proceed criminally against the debtor for passing a bad check. This course of action, however, can be a bit tricky. You would first have to prove fraud on the debtor's part (i.e., the debtor knew at the time they passed the check that there would not be sufficient funds in their bank account to clear it). This is difficult to do. Also, most District Attorney offices do not put a high priority on pursuing this type of matter, so you could be in for a long wait.

Engaging a reputable collection agency to pursue the debtor for payment through the normal collection process is probably your best bet for a cost-efficient and timely resolution to the matter.

Robert M. Tharnish
Vice President Corporate Quality

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Disclaimer: This article is not intended to be legal advice and is not a substitute for competent legal advice on the referenced subject.

ABC-Amega Inc., providing commercial receivable management servies since 1929, can help with NSF checks and delinquent customers. For more information, complete our Information Request form or email info@abc-amega.com.