8.32 Dishonored (Returned) Checks

Policy Information

Purpose and Summary

To provide policies and procedures regarding checks deposited by the University, which are returned by banks and other financial institutions for insufficient funds and other reasons.

Source

Arizona Revised Statutes (A.R.S.), including but not limited to: Sections 13-1807 and 12-671.

Scope

This policy applies to all University locations and units, including all University extensions, satellite locations, and off-site campus units, both domestic and international.

This policy applies to the collection of monies in connection with University activities.

Definitions

1. Dishonored/Returned Check: A check that was dishonored and returned by a bank or other financial institution for reasons including, but not limited to:
   1. Non-sufficient Funds (NSF)
   2. Stop Payment
   3. Closed Account
   4. Endorsement Issues
   5. Counterfeit/Fraudulent

Policy

1. All funds received from any source must be deposited in accordance with policy 8.10 Cash Receiving.
2. In accordance with 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 three (3) returned checks are received, check acceptance privileges at the University are revoked, even if paid promptly.

Compliance and Responsibilities

Report violations, complaints and questions about this policy to Mark Barton, Bursar at mbarton@email.arizona.edu or (520) 621-3227.

Procedures

Student Returned Checks

1. When a check is dishonored by a bank or financial institution, it will be returned to the Bursar’s Office (dishonored checks will be presented twice). The Bursar’s Office is responsible for initiating and monitoring all collection efforts for dishonored checks.
2. Items that can be corrected and redeposited (for example, endorsement errors) will be redeposited immediately.
3. 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.
4. An attempt will be made to contact the individual by phone.
5. The individual's Student account will be flagged with a financial hold (AR) flag and the "bad check counter" will be increased.
6. A $25.00 dishonored check fee will be assessed and posted to the individual's Student account.
7. The individual will be ineligible for registration, registration refunds, transcripts, diplomas or other University services until payment is received in full.
8. 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.

Department Returned Checks

1. When a check is dishonored by a bank or financial institution, it will be returned to the Bursar’s Office (dishonored checks will be presented twice).
2. Items that can be corrected and redeposited (for example, endorsement errors) will be redeposited immediately.
3. The returned item can be charged back to the original depositing Department account via UAccess Financials by Financial Management. 
4. A copy of the returned item will be attached in the notes section of the Distribution of Income and Expense document.
5. The original depositing Department is responsible for initiating and monitoring all collection efforts for dishonored checks.
6. Departments may be charged for the check and related bank service charges, determined by the Bursar’s Office, 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.

Related Information

Dishonored Student 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, Thursday, Friday 8:00 a.m. - 4:00 p.m. and Tuesday and Wednesdays 9:00 a.m. - 4:00 p.m. (except University holidays). Payment must be made by Cashier’s 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: ______________________________________