We have a customer that is trying to cash a cashier's check and we aren't sure it's a good check. We placed a hold on it and now the hold time is up. We can't get the other bank to confirm that it is legitimate. At this point if we cash it can the other bank deny funds? I'm afraid this woman is caught up in a sweetheart scam and even after several discussion with her about her account, upper management isn't willing to close her account out.

Why did you accept it for deposit in the first place? How long of a hold did you place - the payor bank only has until their midnight deadline to return a fraudulent check.

I don't know why they accepted it. We did a 7 day hold. So we should be in the clear now then?

Well, 7 business days should have been plenty of time for it to clear. How you hold an entire cashier's check for 7 business days - well that is another question.

I'm a tad confused, you say you accepted a cashiers check and placed a hold, but now are asking if it is okay to cash it. Did you send the item for clearing in your cash letter on the day received for deposit? If so, you don't have it to "cash" as the item is gone, your choice is to release the hold and allow the customer access to the funds, or extend your hold (although not sure what legal reason you would have to extend the hold).

if she is caught up in a sweetheart scam, she would be sending money out, not getting it in.

I suppose is what I am asking is what did you do with the actual cashier's check that was presented for payment?