Bank system must accept the need for a reality check

My chequebook doesn't get much use. Not through meanness, I'm just a bit phobic about it - like people who avoid the cracks in the pavement. I sign my name with all the confidence of the trainee sushi chef filleting his first puffer fish on the morning after a late night at the karaoke club with the lads. The possible jail time involved for writing a bad cheque only partly explains my trepidation.

It would be worth the risk if I didn't have such a poor bank and an even poorer balance. I've never really trusted them since they sent me a cheque book and credit card with only my first name printed on both - like I was "Bono". I rang to complain but it was impossible to get angry with Bambi from the call centre. Replacements arrived a week later identical to the first lot. Maybe I needed to apply for some sort of "Status" Surname account. I thought about calling Bambi again but didn't in the end. It would only have upset him.

The lady on the checkout at Lulu didn't seem to mind about my mono moniker, so as long as I could get by without resorting to getting my chequebook out, I was happy. The combination of my hapless lender and the potentially harsh legal consequences of having insufficient funds is enough to keep it locked away in the drawer where I keep my lint and Allen keys. After all, having insufficient funds and I go back a long way and there's nothing to be gained from criminalising a relationship that has served me through thick and thin, though mainly thin.

So it was encouraging to hear that new rules covering bounced cheques are being prepared. The expectation is that the new regime may go some way towards decriminalising an offence that has rapidly clogged the country's penal system since the onset of the economic downturn. For the most part, people who write bounced cheques aren't proper, scary villains. You won't find them huddled on the benches of the exercise yard comparing their prison ink. They are, in large part, the jay walkers of the regional criminal fraternity. If it is really necessary to incarcerate them, then a picket fence and some gardening magazines generally does the trick.

The penalties associated with writing bad cheques are a legacy of a gilded time before twitter and iPads, when it was necessary to ensure that payments would be honoured. The prospect of six months' porridge and a one haircut, sides and back, was a very efficient way of providing that assurance. But more recently it has also been enough to dissuade some honest entrepreneurs experiencing short-term cash flow problems from trying to save their businesses.

Many small traders have instead chosen their liberty over their lifestyle and simply flipped the sign on the shop door to the side that says "Closed". That has hurt the economy by needlessly scaring away companies that may have otherwise endured to provide jobs and contribute to growth. Ironically, while bounced cheques have come to define the most prevalent type of criminal deception in the country, the system of prosecuting the offence has on occasion helped other serious fraudsters escape capture. This month, a group of unfortunate builders merchants in Dubai claimed to have lost about Dh10 million (US$2.7m) worth of African hardwood and other goods in what is known as the "long firm scam".

It works by conning suppliers with several small orders paid for with cash before a big one that is agreed with the promise of a cheque. That is generally the last time the supplier ever sees of that particular customer. Because a fraud case of this kind cannot be registered with police until a cheque actually bounces, the con men are often long gone by the time an investigation starts. It's one reason why every novice African hardwood vendor should really rent a copy of The Sting before delivering his first lorry load of mahogany.

At the most basic level, a bad cheque represents a broken promise. But there have been bigger broken promises and ones that have created far more financial loss, personal hardship and even tragedy these past two years. The coming legislation represents a great opportunity to redress some of the inequities of a system that is simply not good for business any more. But, above all, the new rules need to ensure that it's the puffer fish of the criminal world that ultimately end up being caught - and not the harmless small fry.

@Email:scronin@thenational.ae