Maryland Check Laws


Bad Check:
When the maker of a bad check fails to pay within 10 days after the bad check has been dishonored, the holder of the bad check may send a written notice of dishonor to the maker demanding payment for the face amount of the check and a collection fee of up to $25.00. If after 30 days from the date the written notice of dishonor was sent the maker of the bad check continues to fail to pay, the holder may be entitled to additional damages for an amount up to 2 times the amount of the check, but not more than $1,000. The written notice of dishonor shall be sent by mail to the last known address of the maker, and must substantially comply with the following form: "NOTICE OF DISHONORED CHECK Date _____ Name of Issuer ___________ Street Address ___________ City and State ___________ You are according to law hereby notified that a check or instrument numbered _____ and dated _____, drawn on the _____ bank of _____ in the amount of _____ has been returned unpaid with the notation the payment has been refused because of _____ Within 30 days from the mailing of this notice, you must pay or tender to _________________________________ (Holder) sufficient money to pay such check or instrument in full and a collection fee of $ _____ (not more than $25). If payment of the above amounts is not made within 30 days of the mailing of this notice of dishonor, you may be liable under з 15-802 of the Commercial Law Article, in addition to the amount of the check or instrument and a collection fee of up to $25, for an amount up to 2 times the amount of the check or instrument, but not more than $1,000. In addition, you may be prosecuted under the Maryland Criminal Code (Article 27, зз 140 through 144) and subject to the following penalties: (1) If the property or services has a value of $300 or more, a fine not exceeding $1,000 or imprisonment not exceeding 15 years, or both; (2) If the property or services has a value of less than $300, a fine not exceeding $100 or imprisonment not exceeding 18 months, or both. It shall be a complete defense to any action brought by any holder under з 15-802 of the Commercial Law Article that, within 30 days from the mailing of "the Notice of Dishonored Check", the maker or drawer has paid the holder the full amount of the check or instrument and collection costs of not more than $25. A holder may not recover any damages if the holder has demanded of, and received from, the maker or drawer collection costs exceeding $25. It shall be a complete defense to any action brought under з 15-802 of the Commercial Law Article by a holder to whom a dishonored check or other instrument was issued that the dishonor of the check or other instrument was due to a justifiable stop payment order or to the attachment of the account. In any action brought under з 15-802 of the Commercial Law Article by a holder or holder in due course to whom a dishonored check or other instrument was negotiated, the action is subject to all valid defenses that may be raised by the maker or drawer against the holder or holder in due course under Title 3 of the Commercial Law Article."



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