8.32 Dishonored Checks

Purpose:	To provide departments with information about how dishonored checks are processed by the Bursar's Office.
Policy Owner:	Bursar

Definition

1. Dishonored Checks: Checks deposited by the University, which are returned by banks and other financial institutions for insufficient funds.

   Policy

2. In accordance with Arizona Revised Statutes (A.R.S) Section 13-1807, individuals issuing a check against an account in which there are insufficient funds to cover the check may be subject to criminal prosecution.

3. When a check is dishonored by a bank or financial institution it will be returned to the Bursar (dishonored checks will be presented twice). The Bursar is responsible for initiating and monitoring all collection efforts for dishonored checks.

   NOTE: Departments may choose to collect on a dishonored check, refer to paragraph 12 for details.

   Procedures

4. Items that can be corrected and redeposited (for example, endorsement errors) will be redeposited immediately.

5. The Dishonored Check Notification Letter will be completed and mailed by certified mail to the individual. Restitution must be made within fourteen (14) days of receipt of the letter.

6. An attempt will be made to contact the individual by phone.

7. SIS Checks: In addition to the procedures outlined in paragraphs 4-6, if a check is processed through the Student Information System (SIS):
   1. The individual's SIS account will be flagged with a financial hold (AR) flag and the "bad check counter" will be increased.

   2. A $25.00 dishonored check fee will be assessed and posted to the individual's SIS account.

   3. The individual will be ineligible for registration, registration refunds, transcripts, diplomas or other University services until payment is received in full.

   4. Bursar-Accounts Receivable will track the returned item as long as the student remains enrolled. When the student is no longer enrolled, precollection efforts will begin, and if unsuccessful, the debt will be assigned to a collection agency. Collection costs are passed on to the debtor as identified in A.R.S section 12-671.

8. Non-SIS Checks: In addition to the procedures outlined in paragraphs 4-6, if a check is not processed through SIS:
   1. A $25.00 dishonored check fee will be assessed.

   2. If payment of a dishonored check is not received within two (2) weeks of receipt of the certified Dishonored Check Notification Letter, the debt will be assigned to a collection agency for six (6) months. If an agency is unable to collect, the dishonored check will be charged back to the department.

      NOTE: The department that accepted payment of the check may request the dishonored check be charged back to the department before it is assigned to a collection agency.

9. When three (3) returned checks are received in a fiscal year, check acceptance privileges at the University are revoked for the remainder of the fiscal year, even if paid promptly.

10. If four (4) or more returned checks are received in a fiscal year, all check acceptance privileges at the University are permanently revoked. Cash receiving departments will receive a bad check writer report monthly.

11. Departments will be charged for the check and related bank service charges in the following instances:
    1. A stale dated, two-party, or foreign check was accepted,

    2. An exception to the University cash handling procedures outlined in Policy 8.10, Cash Receiving, was made when the check was accepted,

    3. The maker's name and address cannot be found,

    4. The check was forged,

    5. A check was accepted from an individual whose check privileges are suspended,

    6. "Stop Payment" items which cannot be resolved through research, and

    7. When requested by the department.

12. Should a department choose to initiate collection on a dishonored check:
    1. The department must provide the Bursar's Office with the account number and object code to which the check was originally deposited.

    2. The Bursar's Office will process a journal entry to reverse the receipt and will send the original check to the department.

    3. The Bursar's Office will not send a Dishonored Check Notification Letter.

Dishonored Check Notification Letter-Sample

							DATE:  _______________

							SID#:  _______________

You are, pursuant to applicable law, hereby notified that the check described
below, issued by you to the University of Arizona, has been dishonored.


Check # ____________  Amount of Check $ ____________    Check Date ___________

Name of Bank/Financial Institution ___________________________________________

Payable to  __________________________________________________________________

Reason for Dishonor __________________________________________________________

In some instances, this is the result of a mistake; however, you still need to be
aware of the following information.

You have fourteen (14) days from the date of this notice to pay the total amount due.
Payment must be made by mail (DO NOT MAIL CASH) in the envelope provided, or at
the Bursar's Office-Tellers, Administration 208.  The tellers accept payments
Monday through Friday (except University holidays) from 8:00 a.m. until 4:00 p.m.
Payment must be made by Cashiers Check, Money Order, or cash (if paying at the
Bursar's Office-Tellers).

The amount you must pay is as follows:	 Amount of Check $ ________________

					 Service Charge	 $ ________________

						Subtotal $ ________________

					 Account Balance $ ________________

					 Total Amt. Due  $ ________________

University services (such as transcripts, diploma, future enrollment, registration
refunds) will be withheld until this debt is resolved.

If appropriate, it is our intent to turn over the check and any other available
information related to this incident to the Office of the General Counsel for
prosecution.  Under A.R.S. Section 12-671, you may be liable for twice the amount of the
check, or $50.00, whichever is greater, plus court costs and attorney fees.

If the University has received three returned checks, your personal check
may no longer be accepted by the University.

If you have any questions, please contact: ______________________________________