Robert A. Marsico
Partner
201-896-7165 rmarsico@sh-law.comFirm Insights
New Law Protects New Jersey Businesses From Bad Electronic Transfers
Author: Robert A. Marsico
Date: September 26, 2014
Key Contacts
Back
While paper checks have been replaced by electronic funds transfers for many commercial transactions, New Jersey businesses still have to contend with rejected payments. Earlier this month, Gov. Chris Christie signed two measures into law that will help New Jersey businesses address bad electronic funds transfers.
The first new law, Assembly Bill 1162, amends New Jersey’s existing law concerning the issuing or passing of bad checks. The new law makes it clear that electronic funds transfers are included within the scope of the statute.
The existing New Jersey law applies to checks, drafts, and orders of withdrawals that are dishonored for lack of funds or because the maker does not have an account with the drawee. It provides a process for the payee to send the maker a demand for payment using a specific form, which indicates the amount owed. If the maker fails to pay the amount within 35 days of the date of the mailing of the demand for payment, the maker is subject to monetary damages, which may not exceed the amount of the check, draft, order, or electronic funds transfer by more than $500. Businesses can enforce their rights by filing a civil action in a court of competent jurisdiction. The same process now also applies to electronic funds transfers.
Individuals who knowingly make bad electronic transfers now also face criminal penalties. The second law, Assembly Bill 1153, amends New Jersey’s criminal statute (N.J.S.A.2C:21-5) that governs criminal liability for the issuance or passage of bad checks to clarify that electronic funds transfer are included within the scope of covered offenses.
Under the prior statue, a person violates the law if he issues or passes a check knowing that it will not be honored by the drawee. The amendment makes it clear that a person also commits an offense under this section if he authorizes an electronic funds transfer knowing that it will not be honored by the drawee. The amount of the check or electronic fund transfer determines the grading of the offense, which can range from a disorderly persons offense to a second-degree crime.
For specific tips to help your New Jersey business get paid, please check out our prior post.
- Business
- New Jersey Business Litigation Attorney
- New Jersey Business Regulations
- New Jersey Employment Attorney
- NJ attorney Scarinci
- Scarinci Hollenbeck
- Securities and Finance
- Practices: Corporate Transactions & Business, Financial Services & Regulatory Practice, Litigation, Commercial Litigation - Business Litigation Attorney
- Locations: Red Bank, NJ, Little Falls, NJ, New York City
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Related Posts
See all
Assignment for the Benefit of Creditors: An Alternative to Bankruptcy for Distressed Businesses
When a business reaches the point where it can no longer service its debts or otherwise resolve its liabilities, management is often faced with a difficult question: is a bankruptcy filing necessary or is there another way to perform an orderly liquidation or sale of the business assets? While Chapters 7 and 11 of the […]
Author: John D. Giampolo
Breaking Down New Jersey’s “Mansion” Tax: What Buyers and Sellers Need to Know
For many years, the New Jersey Mansion Tax has been a significant consideration in high-value real estate transactions. Recent legislative changes, however, have substantially altered how the tax operates, including who is responsible for paying it and the amount owed in certain transactions. Whether you are purchasing, selling, or investing in New Jersey real estate, […]
Author: George McGowan
Estate Planning for Digital Assets Under New Jersey Law
As our personal and financial lives increasingly move online, estate planning must evolve to address a new category of property: digital assets. From email accounts and social media profiles to cryptocurrency and cloud-stored business records, these assets often carry both financial and sentimental value. Yet, without proper planning, they can become inaccessible—or even lost—upon incapacity […]
Author: Marc J. Comer
The Role of Representation and Warranty Insurance in M&A Transactions
In today’s mergers and acquisitions market, representation and warranty (R&W) insurance has become a common feature of deal negotiations. Once used primarily in larger transactions, R&W insurance is now frequently incorporated into middle-market deals as buyers and sellers look for efficient ways to allocate risk and close deals. When structured properly, R&W insurance can help […]
Author: George McGowan
You Just Received a Federal Grand Jury Subpoena in New Jersey: Now What?
Receiving a federal grand jury subpoena is not something most businesses or individuals anticipate. While it can be concerning, a federal grand jury subpoena does not necessarily mean that you are being accused of wrongdoing. It does, however, mean that a federal criminal investigation is underway and that federal prosecutors believe you may possess information […]
Author: George McGowan
Why Every Business Should Conduct an Annual Insurance Coverage Review
Most New Jersey business owners purchase insurance policies, file them away, and assume they are protected if a claim arises. Without a regular insurance coverage review, many companies discover gaps only after a lawsuit, cyberattack, property loss, or other significant event occurs. An annual insurance coverage review can help businesses identify potential risks, ensure their […]
Author: George McGowan
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Sign up to get the latest from our attorneys!
Explore What Matters Most to You.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.