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Replacement of Stale Dated Money Order
by John Burnett, BOL Guru
Guru Bio
Question: A non-customer had a money order which was stale dated (purchased May 2006 and it is January 2008) and was under the assumption the money order would never expire. He tried to cash the money order at his bank and it was returned for being stale dated. He then came into our branch with the returned money order, as we are the originator of it, and wanted us to replace it for him. Does the purchaser have to be the one to stop the money order and authorize us to reissue or can we reissue because the non-customer is bearing the money order? The payee of the money order is not the purchaser and we were unable to contact the purchaser for confirmation.
Answer: As the issuing bank, you have the option of honoring or refusing to honor the money order once it is stale dated. For that reason, you should be able to cash it for the payee (for an individual with adequate identification) or replace it. Unless the purchaser placed a stop payment on the money order, he doesn't get a say in whether you'll honor it after it has become stale.
First published on BankersOnline.com 4/07/08
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