The D.C. government has adopted stern new procedures to reduce the loss of revenue from bad checks, including the introduction of an aggressive centralized collection system, city controller Alphonse Hill announced yesterday.
Hill, responding to a U.S. General Accounting Office report that described D.C. check-collection procedures as lax, had proposed in February that the city require cash or cashiers' checks for traffic tickets or fees under $50. It encountered a storm of protest.
The GAO estimated that the city lost $2.1 million last year from bad checks that were not collected.
Hill said 11,000 checks were returned during the 1981 fiscal year, 4,000 of them for amounts less than $25. It cost the city an average of $18 to process each dishonored check, he said.
Under the procedure adopted by Hill as an alternative to the cash proposal, banks will be asked to return dishonored checks quickly to the city, which will immediately send letters to the check writers. If a payment is not received within a week, Hill said, the Finance and Revenue Department will make telephone calls or personal visits to collect the funds. Hill said his staff has been reorganized to provide the manpower for this undertaking.
If collection efforts fail, Hill said the city will go to court to force collections.
The Transportation and Environmental Services departments, which receive a heavy volume of checks for traffic tickets and water bills, will carry out their own procedures to collect dishonored checks, Hill said.
As one step in the new program, Hill said, a list of bad-check writers will be prepared and maintained for distribution among city agencies. Steps will be taken to stop services to those who fail to redeem bad checks, he said, and those who have given the District government two or more such checks will be notified that their personal checks no longer will be accepted.
In addition, District employes no longer will be permitted to cash personal checks at city cashiers' offices.