Cracking Down on Getting Stiffed
Casey Maule owner of Diamond Jim's restaurant has a check problem. How to keep long time customers loyal without yanking away one of their most prized conveniences: check cashing.
But the more checks Maule cashed the more they bounced. And experience taught him that once a check turns to rubber, he may as will kiss it goodbye.
Maule says, "Collection agencies don't even start to find anybody for the first year, and your lucky to see 50%." While Maule and other Clark county merchants welcomed the County Prosecutor's program, by mid September Maule had recovered the full amount from only two of the four checks he had submitted to the program.
[The Green Sheet] has reported on the phenomenon called "Check Restitution Programs" which have proliferated in the western United States over the last few years. Earlier this year we noted two programs which were discontinued based on their financial results.
We now report on yet another such example. In south western Washington (Washington State), the Clark County Prosecutor's Office reported the results of their "Check Restitution" program in glowing terms. Let's look at the numbers reported. Checks submitted by merchants to the Prosecutor's Office, 1,075. Eligible for the program, 933. Average check value $38.00. Checks Cleared 140. Value of Restitution Collection $5,114.00.
To qualify for these programs, the check must have been sent through the bank twice; checked against a photo identification; submitted to the county within 30 days, and issued in Washington. Post-dated or stop-payment checks are ineligible.
While the Prosecutor's office receives a small piece of the income created by the private collection vendor, and merchants receive any money collected, the results seem less than sterling.
13.3% of the checks submitted by merchants are rejected from the program, with 15.0% clearing. Of the $40,850.00 submitted (1,075 checks X $38.00), $5,114,00 came from restitution collections, or 12.5% of the dollars. While the Bad Check Cop running the program, Debbie Garvin says "the program is working: the number of bouncers is on the decline," the results in Clark County and the rest of the world seems to disagree.
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