ROGERS -- Technology, credit cards and debit cards have reduced the number of hot checks written locally from several thousand to a few hundred checks annually. The drop also has reduced revenue cities and counties receive from prosecuting people who write hot checks.
"The number of hot checks we get a year has dropped like a rock," said Ben Lipscomb, Rogers city attorney.
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Hot Checks
The 2013 Federal Reserve Payments Study shows card payments — credit and debit — now account for more than two-thirds of all noncash payments, while the number of checks paid continues to decline. An update on the study earlier this year stated, “The study commonly compares the most recent trends to previous studies. One such trend is that payments are continuing to become more card-based. Card payments have taken the place of check use for many payments. The rate of increase in card payments continues to be far greater than the corresponding decrease in the use of check payments.”
Source: The Federal Reserve
Nancy Love, who processes hot checks for Lipscomb's office, at one time needed help from other staff members to handle the workload.
"That's the way it was a few years ago. Now I spend more time as a legal assistant and the victim assistance coordinator. Working the hot checks is a part-time job," Love said.
Rogers, Siloam Springs and Springdale still have programs for processing hot checks. The Benton County prosecuting attorney's office handles hot checks for Bentonville and small towns in the county. The county office also handles all felony hot checks and some misdemeanor checks from Springdale, Rogers and Siloam Springs, officials said.
"It depends on how the companies that receive the hot check file for prosecution," said Patsy Lepack, the Benton County hot check coordinator. "Some of the big box companies file with the county rather than in the city where the checks were received."
Hot check programs were never intended to be a revenue stream for cities or counties, Love said.
"In the beginning, the fees charged were to pay the salary of the hot check coordinator and nothing more," she said.
Prosecuting hot check writers was designed to protect merchants, said Nathan Smith, Benton County prosecutor-elect who currently handles hot checks for the office.
"It's a service we still need, and will need in the future. There is always going to be somebody that writes a hot check as long there are checks," Smith said.
Before cards became the way most people pay for goods and services, checks were the norm. During the heyday of check writing, cities and counties collected excess revenue from prosecution that more than paid the salary of the hot check coordinator, Smith said.
Hot check revenue for Benton County peaked in 2003 when collection was $847,975. Revenue has steadily declined. The county, in 2010, collected $349,291. The amount was $196,367 last year.
Collections have shown a similar decline in the cities still operating hot check programs.
The total collection of hot checks, victim fees and prosecuting fees in Rogers was $368,861 in 2004. Through Nov. 19, the city has collected $56,399.
Springdale collected a total of restitution, merchant and attorney fees of $269,032 in 2003. By 2010, collections dropped to $133,313. The way hot checks were accounted for changed in 2011 making it difficult to accurately compare recent collections to previous years.
"Obviously, the amount of hot checks handled by this office has declined over the years due to increased use of debit cards, so Linda's (Brown) job has transitioned from hot check coordinator to hot check/victim restitution coordinator," said Ernest Cate, Springdale city attorney.
Siloam Springs officials couldn't supply dollar amounts collected by the city's hot check program. In 2004, the city processed 164 hot checks. The number this year is four.
"We would have to go through each court file to determine the amount of each check for the previous 10 years to get the total of each check," said Sandy Luetjen, Siloam Springs District Court clerk.
"The county used excess hot check revenue for a lot of different things because there weren't many strings attached to say how the money could be spent," Smith said.
As an example, Smith compared drug fund money with hot check revenue. Drug fund money comes from forfeitures, fines and fees and can be used only for things that contribute to fighting drug-related crime.
"We could take money from the hot check program and buy a drug dog, then repay the hot check fund with money from the drug fund," Smith said.
Without the hot check money, the county would have to buy the dog then pay to have it trained and certified before applying for compensation from the drug fund, he said.
The excess revenue the Rogers city attorney's office accumulated via the hot check program was used to buy equipment such as printers, paper and supplies, Lipscomb said.
Springdale and Siloam Springs' hot check programs operated in much the same way, officials said.
Lipscomb said as long as the Rogers program can cover a portion of Love's salary, the city will keep the program.
"If, or when, it gets to the point we can't afford the program, we will turn it over to the county," Lipscomb said.
Smith said if all hot checks were processed through his office, it would mean more revenue for the county.
"But it would depend on the manpower it would take to handle the additional checks. If we had to add a staff member, it wouldn't be worth it. I think we're going to continue to have a hot check program for at least another decade," Smith said.
NW News on 11/23/2014