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Contesting a Stopped Cashier's Check
Ken Golliher, BOL Guru
Guru Bios
Question: We received a cashier's check that was returned "stop payment." We were under the impression that 6 months needed to transpire before putting a stop payment on a cashier's check. If this is the case, is there a way we can dispute the check being returned?
Answer: If this cashier's check has been replaced under UCC § 3-312 the correct reason for return should have been more explanatory; e.g. "previously paid under declaration of loss" or "previously paid under 3-312." Do not assume that the check has been replaced following statutory procedures, and proceed as if it was not. If the check is less than 90 days old, you know statutory procedures were not followed.
Returning it to you "payment stopped" is a clear indicator that the bank doesn't have a clue and it's an invitation for you to file suit. Your first recourse is against the customer who passed the check to you. If I was unable to obtain the funds from my customer, I would respond to the other bank by having my bank's attorney write them and let them know of our plans to accept the invitation.
First published on BankersOnline.com 8/14/06
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