Nicholas Krawec Discusses Rejected Electronic Payments as the New Bad Checks in NACM Article

Bernstein-Burkley Partner, Nicholas D. Krawec, was featured in a National Association of Credit Management (NACM) article discussing how creditors’ can address the increase in rejected electronic funds transfer (EFT) and automated clearing house (ACH) transactions.

From the article:

“Though far from widespread, bad EFT/ACH payment incidents have become more frequent in Pennsylvania, Ohio and West Virginia, according to Nick Krawec, Esq., partner at law firm Bernstein Burkley PC. Statutory language from state to state typically addresses bad check situations, but it rarely specifies or defines EFT or ACH protocol and can be wildly inconsistent, said Krawec …. In addition, enforcement at the local magistrate level can be even worse, in part because there is less familiarity with EFT and ACH compared with bad checks.

In the absence of widespread statutory language changes or demands from state or federal officials for greater enforcement:

  • If not resolved quickly, try using bad check precedent with the customer and ‘send a Notice of Dishonor saying they need to make good,’ said Krawec. Payment will often follow, despite legal statute vagaries.

  • If all else fails, go to court. ‘The only way to find out if bad check law applies to EFT is to take it to court … Maybe it takes a court decision or two to show what the appetite for this issue is,’ said Krawec.

  • Contact state or federal elected representatives. Tell lawmakers, ‘I couldn’t get a judgment because of the way the statute is written. What are you going to do about that?’ Remind them that you vote, said Krawec.”


To read the full article, click here, or view as PDF.




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