Full question:
I have companies asking me to post a post dated check what are the federal and state laws in Michigan regarding post dated checks? banks are stating it is federal law that that cannot be done, the collectors argue that is is common practice & legal. I need to know in detail the law and the code so next time I have it verbatim. I ask because I am taking over my 77 yr old mother & just became her durable power (Agent) and this has been a common practice of hers. I feel it is not legal, even though both parties agree.
- Category: Banking laws
- Date:
- State: Michigan
Answer:
Almost all banks have in their rules/regulations (that should be given to you at the time the account is opened) that they can cash post dated checks unless you notify them, in writing, not to cash it. If you signed your bank's signature card then you agreed to those rules/regulations and confirmed receiving them. postdated items are described in Article 3, Section 113 of the Uniform Commercial Code. Many banks will honor postdated checks, even if they are deposited before the postdate. Banks are permitted to pay checks even though payment occurs prior to the date of the check. A check is a negotiable instrument—the payee, the person to whom the check is written, may negotiate it through the banking system at any time". Nonetheless, if the bank has been given proper notice of the post-dating, the Uniform Commercial Code requires that the notice be honored, or the bank be held liable for damages.
Under the Fair Debt Collection Practices Act, a debt collector is not allowed to use "unfair or unconscionable means to collect or attempt to collect any debt by:
· Accepting a check or other payment instrument postdated by more than five days unless the debtor is notified in writing of the debt collector's intent to deposit such check or instrument not more than ten nor less than three business days prior to the deposit.
· Asking for a postdated check or other postdated payment instrument for the purpose of threatening or instituting criminal prosecution.
· Depositing or threatening to deposit any postdated check or other postdated payment instrument prior to the date on the check or instrument."
Please see;
http://www.law.cornell.edu/ucc/3/article3.htm#s3-113
http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre27.pdf
This content is for informational purposes only and is not legal advice. Legal statutes mentioned reflect the law at the time the content was written and may no longer be current. Always verify the latest version of the law before relying on it.
