Dear Attorney,

I received a check, but when I deposited it, the check bounced. I’m unsure of what legal action I can take against the issuer. Can you guide me on my options? What are the legal consequences for the person who issued the check?

—Concerned Recipient

Insights

Under Philippine law, the issuance of a bounced check is primarily governed by Batas Pambansa Blg. 22, also known as the Bouncing Checks Law. This law aims to prevent individuals or entities from issuing checks without sufficient funds or credit, causing potential financial harm to the recipient of the check.

Key Elements of Batas Pambansa Blg. 22:

Issuance of a Check: When a person issues a check, it implies that there are sufficient funds in their bank account at the time the check is presented for payment.
Dishonor of the Check: A check is considered "bounced" or dishonored when the bank refuses to pay the amount written on it due to insufficient funds or the account being closed. The dishonor can occur upon presentation for payment.
Notice Requirement: The law mandates that the issuer must be notified in writing that the check was dishonored. The issuer is given five banking days to make good on the amount, either by depositing sufficient funds or settling the issue with the payee.
Criminal Liability: Failure to address the dishonored check within the specified period exposes the issuer to criminal prosecution. If found guilty, the issuer may face imprisonment of up to one year or a fine, depending on the circumstances.
Civil Action: Aside from criminal liability, the payee may also pursue a civil case to recover the full amount of the check, plus any damages or fees incurred.

Defenses Against Liability:

The issuer may argue that the check was not meant for encashment, or that the check was post-dated with the understanding that it would only be deposited upon certain conditions being met. However, these defenses must be proven, as the presumption under BP 22 is that the check was issued for payment.

Conclusion:

A bounced check can have severe consequences for the issuer, including criminal and civil liability. If you are a recipient of a dishonored check, it is advisable to issue a formal demand letter and consult with a lawyer to ensure that your rights are protected under the law. The key is to act promptly, as the law provides strict timelines for enforcing your rights.