Thursday, July 21, 2005 | 10:40 a.m.
Department of Motor Vehicle records show that at least 120 customers got away with passing bad checks two or more times between 1990 and 1999, when the agency was stuck with more than $500,000 in bad debt.
One man passed seven nonsufficient funds checks to the state agency for license and registration renewals or new registrations between 1996 and 1999, according to DMV records released to the Sun this week.
After giving the state agency a $23.90 check on Feb. 7, 1996, he kept returning to DMV offices and passing larger checks until his final check of $205 was passed on Feb. 8, 1999, DMV records show.
Dennis Colling, the DMV's chief of administration, says procedures have been tightened in the wake of passage of a 2003 law to fix the system that allowed motorists to get away with passing several bad checks over several years.
"With passage of AB314, we no longer are required to do business with people who owe debt to the state," Colling said.
As a result, he said, about the only people who can initially get away with passing more than one bogus check now are those who hit different DMV offices on successive days, passing a series of checks before the first one bounces.
Colling said once the first bad check is recorded, the motorist is flagged on all DMV computers. The DMV won't even accept cash payments for new licenses and registrations or renewals until the bad check is made good, Colling said.
The state Board of Examiners last week agreed to wipe out the $534,096 debt from about 2,700 bad checks received by the DMV in 1999 or before.
Colling, however, said even though that debt technically will be wiped off the books, the DMV still will refuse to do business with motorists who still have a bad debt showing on the computer and refuse to pay.
Colling, however, indicated it is unlikely much more money from those debts will be collected because it is believed that all or most of the people on the list have either moved out of state or are dead.
The state, he said, tried to reach them through in-house collections and private collections before seeking to have the debts written off.
People who owe the DMV money from bad debt won't be getting checks as part of the $300 million rebate program authorized by the 2005 Legislature, DMV officials said last week.
Because of stiffer penalties, bad debt has gone from being frustrating red ink to actually being a money-maker for the DMV.
For fiscal 2005, the DMV was victimized by $1.2 million in 4,661 bad checks, but Colling said, the DMV during that same period collected $1.9 million in bad checks and penalties for 2005 and prior years.
The recovered monies included $1.25 million in regular fees, $114,514 in $25 bounced check fees, $114,034 in late registration fees, $64,425 in privilege taxes (government services tax and supplemental government services tax) and $428,279 in a state penalty of triple the bounced check's amount up to $500.
While 4,661 bounced checks in one year may sound like a lot, they account for just 0.4 percent of all checks written to the DMV in fiscal 2005, Colling said.
Colling said that similar low percentages applied to bounced checks in the 1990s. But, he said, under laws back then, the DMV had no choice but to continue to do business with people who previously bounced checks, especially when they came back with different cars to register.
And, apparently, checks were accepted from motorists no matter how large the amount of their prior bad checks. For example, according to DMV records, for three consecutive months in 1995, one woman passed three bad checks totaling $10,784 -- the first and last each for greater than $4,400.
The two largest bounced checks were for $7,964 on Nov. 11, 1997, and for $7,283.24 on May 4, 1998.
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