Bad Checks and Check Fraud

Check fraud is one of the biggest challenges facing businesses today. According to national estimates, check fraud costs American business and banks $50 billion a year. Check fraud takes a number of forms including altered payee or amount information, counterfeited, forged signature or endorsement, and checks drawn on closed accounts or non-sufficient funds (NSF).

Maine Law Regarding Bad Checks

17-A MRSA 29 §708. Negotiating a worthless instrument

“A person is guilty of negotiating a worthless instrument if the person intentionally issues or negotiates a negotiable instrument knowing that it will not be honored by the maker or drawee.”

A worthless instrument includes a check that is written on a closed account or on an account that they know does not have the funds to cover the check. Proof that the drawer had no account with the bank at the time they negotiated the check is proof that they knew it would not be honored. Additionally, if the drawer did not deposit enough funds to cover the check within five days of receiving written notice that there were insufficient funds, it can be inferred that they knew the check would not be honored.

17-A MRSA 29 §703. Forgery

”A person is guilty of forgery if, with the intent to defraud or deceive another person or government, the person falsely makes, completes, endorses or alters a written instrument, or knowingly utters or possesses such an instrument.”

This section of Title 17-A makes it a crime to forge a person’s signature or endorsement on a check. This can include forging who the check is made out to or the amount of the check.