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Suspicious Activity & Stop Payments
Question: We have a customer who keeps a very low balance in her account who we suspect is doing something wrong. She comes in and places stop payments on checks she has written to a large department store. The dates on the checks are usually the day she comes in and the day before. The checks she puts the stops on each time total much more than she has in the account. We think she is buying merchandise that she has no intention of paying for. Should we accept the stops? Is there any other action we need to take? We really would like to get rid of the account.
Answer: It is against the law to write a bad check, and a check that is written, with knowledge, against non-sufficient funds is already a problem. Writing the check with the intent of putting a stop payment on it adds to the problem. After our conversation, we determined you had already accepted the stop payment. However, you said you are suspicious of her actions, which is all the reason you need to file a SAR for reason of "issuing bad checks".
As far as getting rid of the account, you have the right to do business with anyone you choose, and you also have the right to NOT do business with anyone you choose. I would also close the account as quickly as possible, after giving her a ten day notice that you are doing so. And watch the account closely for those ten days.
Copyright © 2002 Bankers' Hotline. Originally appeared in Bankers' Hotline, Vol. 12, No. 7, 9/02
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