“The Ministry of Commerce and Industry’s offices that deal with this issue will no longer receive direct complaints from people who have been cheated,” said Abdul Aziz bin Kulaib, assistant undersecretary for legal affairs at the ministry.

“They will now only review those cases that have been referred to it by the Public Prosecution and Investigation Commission once a police inquiry has been carried out,” he said, adding that anyone found violating regulations would be stringently punished.

Bin Kulaib said the new procedures have been introduced following instructions issued by Second Deputy Premier and Minister of Interior Prince Naif who called for the implementation of a new law governing the issue.

“Under the law, anybody who has been accused of issuing a bad check will be subjected to punitive action. A complaint can be lodged against the drawer if a check was dishonored on presentation because of insufficient funds,” he said.

“The law outlines six situations in which victims can take legal action against the issuer. These include a check bouncing due to insufficient funds, withdrawal of a part of the deposit by the issuer after issuing the check, asking the bank not to honor the check, or putting a wrong signature on the check to ensure it is not processed,” he added.

Bin Kulaib warned against the reckless practice of issuing post-dated checks without insufficient funds. “This is a criminal offense under the amended 118 article of the bill of exchange law. Those engaged in issuing bad checks will be penalized with a maximum jail term of three years and fines of up to SR50,000,” he said.

He added that the names of violators will also be published in the media and that such cases will be lodged with the police as this is now a criminal offense.

“The offices that deal with such incidents at the Ministry of Commerce and Industry will then examine the cases and issue a judgment within 30 days. The offices have jurisdiction to exonerate offenders if they pay the amount or resolve the matter through conciliation,” he said.

He added that anyone convicted would be sentenced to jail for a maximum of five years and also fined up to SR100,000 if they repeat the offense within three years.

The Saudi Company for Credit Information (Samah) recently released a report showing that there has been a sharp decline in the number of bounced checks at the end of the second quarter of 2010. The value of bounced checks dropped 52 percent to SR2.9 billion during the period from SR6 billion during the same period last year. The number of bounced checks fell 25 percent from 39,900 in the second quarter of 2009 to 29,750 during the second quarter of 2010.