Dishonored Checks: Legal Implications and Procedures
In Thailand, issuing a dishonored or bounced check can lead to serious legal and financial consequences for both the issuer and the recipient. Here’s an in-depth look at the legal framework, penalties, and processes related to bounced checks in Thailand, including offenses related to cheque issuance.
Understanding Bounced Checks in Thailand
1. Legal Framework
Bounced checks are governed by the “Bounced Cheques Act B.E. 2551 (2008)” in Thailand. This act sets out the legal provisions and procedures for handling dishonored checks.
2. Definition
A bounced check occurs when a check issued by an individual or entity is presented for payment at a bank, but the issuer’s account lacks sufficient funds to cover the amount specified on the check.
Offenses Related to Cheques
In today’s global economy, cheques are a preferred method for conducting transactions due to their convenience and perceived security. However, Thailand treats the issuance of cheques without sufficient funds as a legal offense, necessitating careful and moderate use. The legal framework categorizes fraudulent offenses related to cheques into two parts: Criminal and Civil. Individuals found issuing a cheque without adequate funds may face incarceration under either category.
Offenses Related to the Issuance of Cheques in Thailand
1. Offence Arising from the Use of Cheque Act, B.E 2497, Section 4
According to this section, any person who issues a cheque to pay for a real and legally enforceable debt involving the following acts shall be considered to have committed an offense:
- With an intention not to honor such cheque.
- With no funds in the account that can be used to honor the cheque at the time of issuing the cheque.
- To make payment in an amount higher than the amount of available funds in the account at the time of issuing such cheque.
- Dishonestly directing the bank not to honor such cheque.
If the bank refuses to pay such cheque when lawfully presented for payment, the drawer is considered to commit an offense and shall be sentenced to a fine not exceeding sixty thousand baht or imprisonment for not more than one year, or both.
2. Cheque Offense under Criminal Procedure Law
Section 7: If an individual identified as the offender in Section 4 remits payment for the cheque to the holder or to a banker within thirty days following the date the drawer is notified in writing by the holder of the banker’s refusal to honor the cheque, or subsequent to the court’s final judgment on the matter, such action will be considered a resolution of the offense according to the Criminal Procedure Code of Thailand.
3. Cheque Offense under Civil Procedure Law
Section 8: If the value of a single cheque or the cumulative total of multiple cheques does not surpass the monetary threshold over which a single judge has jurisdiction in civil matters, the aggrieved party may pursue a civil claim for the cheque’s payment as part of the criminal proceedings. This civil action will be conducted at the court handling the criminal case and will follow the procedures outlined in the Civil Procedure Code of Thailand.
Procedures for Dealing with Bounced Checks
1. Notification
Upon receiving notice of a bounced check, the recipient should promptly inform the issuer and request payment to cover the amount specified on the check. This initial communication is crucial for establishing a record of attempts to resolve the issue amicably.
2. Demand Letter
If the issuer fails to respond or make payment after being notified of the bounced check, the recipient may send a formal demand letter. This letter should request payment within a specified timeframe and detail the consequences of failing to comply.
3. Legal Action
If the issuer does not comply with the demand for payment, the recipient can pursue legal action. This involves filing a complaint with the police and providing evidence of the bounced check, such as the original check, bank notices, and copies of the demand letter. The police will then investigate the matter, and the case may proceed to court.
4. Settlement
In some cases, the issuer may agree to settle the debt out of court to avoid legal proceedings. This could involve paying the amount owed plus any additional fees or charges incurred due to the bounced check. Settling out of court can be a quicker and less costly resolution for both parties.
Tips for Avoiding Bounced Checks
- Maintain Sufficient Funds: Ensure that your bank account has sufficient funds to cover the amount specified on any checks you issue. Regularly monitor your account balance to avoid unintentional overdrafts.
- Monitor Account Activity: Keep track of your account balance and pending transactions to prevent overdrawing your account. Use mobile banking alerts to stay updated on your account status.
- Communicate: If you encounter financial difficulties that may affect your ability to honor a check, communicate with the recipient as soon as possible. Discussing alternative payment arrangements can help avoid the legal consequences of a bounced check.
- Use Electronic Payments: Consider using electronic payment methods such as bank transfers or online payments, which are processed immediately and eliminate the risk of bounced checks. These methods provide more security and transparency for both parties.
Summary
Dishonored checks in Thailand carry significant legal and financial ramifications for both the issuer and the recipient. It’s essential for individuals and businesses to understand their rights and obligations regarding check payments and to take proactive measures to avoid situations involving bounced checks.
At Siam GP, we have successfully managed numerous cases involving bounced or fraudulent cheques. Our legal team is well-versed in the Offense Arising from the Use of Cheques Act, B.E. 2497, and other relevant laws. We are equipped to determine whether your case falls under Civil or Criminal Procedure and guide you through to its resolution. Should you require consultation or have any inquiries, we invite you to contact us for professional and reliable assistance.