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July 29
W-9, W-8BEN and W-8 BENE: IRS issues new forms and new rules;
Deborah Crawford

July 31
ACH Security Framework Rule - Small Rule, Big Implications;
Rayleen Pirnie

August 6
Part I
Flood Insurance: Requirements and Best Practices
A Two-Part Companion Webinar Series;
David Dickinson and Jerod Moyer

August 12
A to Z of Reg E;
Andy Zavoina

August 13
Part II
Flood Insurance: Requirements and Best Practices
A Two-Part Companion Webinar Series;
David Dickinson and Jerod Moyer



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#1699619 - 05/15/12 11:41 AM Stop Payment on Cashiers Check (potential fraud)
jonv Offline
Junior Member

Registered: 07/30/09
Posts: 41
Our customer purchased a cashiers check from our bank and mailed it to a fraudulent business (i.e. our customer is being scammed). Can we place a stop payment on this cashiers check?

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Deposits and Payments
#1699627 - 05/15/12 11:50 AM Re: Stop Payment on Cashiers Check (potential fraud) [Re: jonv]
John Burnett Online
10K Club

Registered: 10/27/00
Posts: 30079
Loc: Cape Cod
Payment cannot legally be stopped on a cashier's check. The issuing bank is obliged to pay it if presented by a person entitled to enforce it. Any holder in due course would be so entitled. See UCC 3-411 and 3-412.
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John S Burnett
BankersOnline.com

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#1699633 - 05/15/12 11:54 AM Re: Stop Payment on Cashiers Check (potential fraud) [Re: jonv]
el guapo Offline
100 Club

Registered: 07/22/04
Posts: 233
Refusal of payment of a Cashier's Check can only be done in the instance of it being lost, stolen, or destroyed. Refer to UCC 3-312: http://www.law.cornell.edu/ucc/3/3-312.html

You cannot place a stop payment on a cashier's check and refusing to pay a cashier's check under any other circumstance than outlined above leaves you open to a financial liability.

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#1699763 - 05/15/12 01:56 PM Re: Stop Payment on Cashiers Check (potential fraud) [Re: jonv]
jonv Offline
Junior Member

Registered: 07/30/09
Posts: 41
Could we attempt to return the cashier's check "Refer to Maker" and hopefully the depository bank would possibly realize their customer is a fraudster?

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#1699798 - 05/15/12 02:40 PM Re: Stop Payment on Cashiers Check (potential fraud) [Re: jonv]
John Burnett Online
10K Club

Registered: 10/27/00
Posts: 30079
Loc: Cape Cod
You could attempt that piece of subterfuge, but at the end of the day the depositary bank, as holder in due course, will come to you with the expectation of receiving payment not only for the check but also any costs it incurred as the result of your refusal to pay.

The moral of this story: It was your customer who was duped and your customer who is out the money. Don't make your customer's gullibility your problem.
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John S Burnett
BankersOnline.com

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#1699862 - 05/15/12 04:14 PM Re: Stop Payment on Cashiers Check (potential fraud) [Re: jonv]
Ken_Pegasus Offline
10K Club

Registered: 08/30/01
Posts: 17115
Loc: Another trip around the sun
Quote:
Could we attempt to return the cashier's check "Refer to Maker"


Your bank is the maker.
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The world is not a wish granting factory. Hazel Grace Lancaster

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#1699866 - 05/15/12 04:18 PM Re: Stop Payment on Cashiers Check (potential fraud) [Re: jonv]
John Burnett Online
10K Club

Registered: 10/27/00
Posts: 30079
Loc: Cape Cod
Perhaps the reference was to The Maker.
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John S Burnett
BankersOnline.com

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#1699872 - 05/15/12 04:26 PM Re: Stop Payment on Cashiers Check (potential fraud) [Re: jonv]
BrianC Online
Power Poster

Registered: 11/26/04
Posts: 2751
Loc: Illinois
Back in my teller days I had a number of customers deposit a check and state that they're going to home and pray that it doesn't bounce.
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I can do all things through Him who gives me strength. (Phillipians 4:13)

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#1699930 - 05/15/12 07:19 PM Re: Stop Payment on Cashiers Check (potential fraud) [Re: jonv]
el guapo Offline
100 Club

Registered: 07/22/04
Posts: 233
This is now a civil matter between your client and the person that they paid with the cashier's check. You don't have a dog in this fight, no matter how much the client may try to make it seem as if it's your problem to fix.

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#1700905 - 05/17/12 06:17 PM Re: Stop Payment on Cashiers Check (potential fraud) [Re: jonv]
Andy Z Online

10K Club

Registered: 10/27/00
Posts: 25191
Loc: On the Net
Logic above aside, if the other bank paid out the funds, "the depository bank would possibly realize their customer is a fraudster" is only going to ensure they want the money from your bank sooner rather than later.

I will say that once upon a time, in a bank far far away, a cashier's check was issued that should not have been. A gal at our bank with a strong personality called the bank we knew was getting the check. The customer drove straight over. Our gal told that bank's cashier (who she knew) that we would not honor the check.

It was a bluff, it wasn't legal, but the customer came back to our bank to discuss the matter. (FWIW I was but a peon in the bank at the time, an observer.) That, and the (stupid) loan that funded that check were both taken care of. We were lucky in more ways than one and the new lender did not last long at our bank.

I give you that story not because it worked, but because losses could have been greater had the customer gone to a savvy attorney and not back to our bank.
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AndyZ CRCM
My opinions are not necessarily my employers.
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