Shift in bad check law leads to chaos in Turkey
ISTANBUL - Hürriyet Daily News
On Feb 3 the check law underwent fine-tuning making it harder for the issuers of bad checks to face prison time. This in turn, has led to abuses by ill-intentioned parties. Hürriyet photoThe tweaking of the check law, which went into effect on Feb 3, has created chaos as people no longer face prison time for writing bad checks. Instead, many firms have simply disappeared, according to a report by daily Radikal.
In Istanbul alone, approximately 100 such firms have simply “disappeared.” In the textile sector five companies have dropped off the radar. In their wake, they have left behind a trail of 200 million Turkish Liras in debt and 800 unemployed workers. Those who were hoping to get paid are on the brink of bankruptcy.
Under the old law, many people were imprisoned for bouncing bad checks. The new law was designed to remedy this particular problem, but now many complain that the new law has led to abuses.
Bank checks are widely used, particularly among Turkish small and medium-sized enterprises, as a short and mid-range payment tool.
“You wake up one morning and realize that the company that you supplied goods to just a week ago is gone,” said Fikri Kurt President of the Association of Knitting Industrialists (ÖRSAD). There were many gaps that needed filling, he told Radikal.
Kurt claims that of the 100 firms that have closed their doors and disappeared in Istanbul over the past month, 30 have taken their money and run.
The President of the General Secretariat of Istanbul Textile and Apparel Exporters’ Association Hikmet Tanrıverdi also told Radikal that there was a general mistrust in the market and that people started doing business with shorter time frames of about two months.
According to new check law, if a holder of a bad check tries to cash the check after a five-year period had elapsed, the bank will not be forced to pay any fee.
Those who issue bad checks will not have it appear on their criminal record, but it will be part of the Central Bank’s records. k HDN