BAD CHECKS

Bad checks can happen to good people. The vast majority of bounced checks will be made good immediately. The only checks you as a treasurer are concerned with are checks made out to the group, any requests for information from merchants, non-SCA groups or individuals should be forwarded to the seneschal.

RECOVERY STEPS

If, at any point, the debtor wants to work something out with you, set up a payment schedule. This schedule may extend over the course of few months, but should not exceed six months. The recommended repayment plan should include a down payment of one-third of the total debt owed. A letter detailing the repayment schedule should be sent to the debtor with one copy kept for your files. Indicate in all your correspondence that money orders or cashier's checks are the only acceptable forms of repayment.

Otherwise, follow these steps one by one until you have exhausted all efforts to recover the funds and any fees you have been charged, or it is decided by the Financial Committee and someone higher up in the Kingdom, that it is no longer worth pursuing.

• Resubmit

  Sometimes checks may be submitted more than once, depending on your banking institution. If the check was returned for insufficient funds, try this after a week or so, to allow time for the person to have gotten paid. According to Tetchubah, you might be able to call their bank and see if there are sufficient funds in their account to cover the check. Needless to say, if this works and there is enough money, redeposit the check quickly! If your bank automatically deposits twice and then marks "Do Not Present Again" then you are ready for the next step.

• Contact by Mail

  As soon as you get the check back from the bank, send a letter. In the letter state:
  • Who you are
  • What happened with the check (account closed, insufficient funds)
  • Date the check was written
  • Check number
  • Amount the check was written for
  • Amount of any fees you have been charged
  • Where to send payment
  • When you expect a response (2 weeks from the letter date is reasonable.)

  If the amount is large, state that you are willing to work something out if they cannot afford to pay the entire amount at once. Send a copy (cc:) to your branch Seneschal, and keep a copy in your files. There is a form letter below that you may use as a guide to help you write your own letter.

  If you know the person, feel free to phone them first, but make notes about the call. I find it handy to at least have the letter printed out, so I've got all the information I need right there. It also gives me a place to write down the day and time I called.

• Contact by Phone

  If you don't hear from the person by the deadline you gave in your letter, attempt to contact them by phone using the phone number on the check. Have your copy of the letter you sent in front of you for reference and note the day and time you called, or attempted to call. If you leave a message, do not mention the check, just ask the person to call you back.

  When you get the person on the phone (and don't discuss this with anyone but a person named on the check.)

  • Don't accuse them of anything.
  • State who you are and why you are calling.
  • Tell them that the check was returned, that you are still owed the original amount, and state that any fees which the bank charged you are now also due from them.
  • Let them know that you are assuming it was some sort of bank mistake at their bank or a simple error that can be easily and quickly corrected.
  • Ask them when you may expect payment, and give them the name and address of the person to whom payment (in the form of a money order or cashiers check made out the the group) should be sent.
  • Give them your address or phone number should they need to contact you, and so they can let you know when the money order is being sent.
  • Let them know that you are willing to work something out if they cannot pay the amount all at once.

  If you have trouble reaching the person, try calling at odd hours within reason -- they may work second or third shift. However, don't harass them, or shift your schedule trying to contact them. If you call once a day at different times for a week with no success, go to the next step. Keep clear records of the days/times you called and save your phone bill if they are toll or long-distance calls so you can be reimbursed by your group (you should get this cleared by the financial committee in advance.) Keep records of all contact attempts made, if the whole thing gets turned over to the Kingdom, clear records will be useful.

• Contact Branch for Information

  If you have gotten no response to your letter and have not been able to reach the person by phone (or if the phone is disconnected), contact their branch Seneschal or Exchequer (if it is someone outside your branch) to see if this is really worth pursuing. They may know the person's new address if they have moved. They also may be able to let you know if it is a lost cause.

• Contact by Mail - 2ND ATTEMPT

  If your deadline passes with no response and you can't get the person on the phone, contact the person by mail again, after checking with their branch Seneschal for their most current address (the other letter may have gotten lost in the mail). State the same information as on the last letter, using today's date, but include the fact that you have every right to report this bad check to a credit information network. Enclose a copy of the first letter. Copy (cc:) their branch Seneschal and Exchequer, your branch Seneschal, and your superior officer. (Their branch officers aren't required to do anything, but just having someone in their branch know they bounced a check can be enough embarrassment to prompt them to cooperate. However, don't send copies to their chroniclers.) There is a form letter below that you may use as a guide in writing your own letter.

• Re-evaluate

  At this point the cost of recovering the funds may be greater than the amount of funds due itself plus phone calls, postage, aggravation, etc. You may decide to write it off as a Bad Debt at this time. Contact your Financial Committee and your Kingdom superior and let them know the status so that they can make a decision whether to drop the issue. At this point, a letter from the Kingdom might be appropriate.

• Write Off or Report to Legal Authorities

  If you have not recovered the funds after six months or so, AND the Kingdom Treasurer or your Regional Deputy agrees, write the check off as a lost cause, and don't accept checks from this person again. Decrease Receivables by the amount of the debt plus fees and expense the whole amount under Bad Debt. You have the option of reporting the bad check information to credit information networks, or, if the amount is large enough, going to small claims court. Even if you get judgment in small claims court, it is up to you to collect. The court won't help you any further than order garnishment of wages - which you must ask for and it costs you money to do that, too. Contact your superior officer for information on how to proceed if either of these are the decision of the branch or guild's Financial Committee. The Seneschal is responsible for these types of legal issues.

• How This Goes on the Report

  • List each bad check and any fees you are charged as a receivable on your report.
  • Do not deduct the amount from anything, even if it was for site fees.
  • When you receive the funds from the person, just erase the receivable (it's a transfer from Receivables to Cash.)
  • Put the check on the report the quarter in which you get the notice from the bank.
  • The check stays on the report until:
    • The check is made good (see above)
    • The Kingdom Treasurer agrees that it is a lost cause (the check becomes a bad debt)

Sincerely,


< Your Name>
< Your SCA Name>

cc: < Seneschal's name>, Chapter Vice President - < your branch name>

TEMPLATE LETTER TO RECOVER FUNDS - SECOND TRY

Sincerely,


< Your Name>
< Your SCA Name>

Enclosure

cc:
< Seneschal's name>, Chapter Vice President - < your branch name>
< Seneschal's name>, Chapter Vice President - < their branch name>
< Exchequer's name>, Chancellor of the Exchequer - < their branch name>
< Kingdom Exchequer's name>, Kingdom Chancellor of the Exchequer

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