We were just burned for several thousands of dollars by counterfeit cashier's checks...again. We even called the supposed issuing bank to verify the checks which they did only to send them back as counterfeit anyways.

We are looking for alternative ways to handle these. I know we can send them through collections, but we have found some paying banks charge outrageous upfront fees regardless of whether they pay or not. I've been asked if we can tell the customer that we won't accept it for deposit but we will send it for collection and then process it as a bank cash item. We have found banks don't charge nearly the fees on items sent this manner.

Thoughts?

are you placing a hold on these? possibly an exception hold for longer periods due to past issues?

We are not putting holds on them since you can't put a hold on a cashier's check.

You can put a hold on a cashier's check, you just have to follow the regulation if it meets one of the conditions (e.g., large deposits).

Well in this case there were several checks all in the $2,000 - $3,000 range and they were not deposited on the same day. None of the exception holds would apply.

So, my question remains. If one of the exception hold reasons doesn't apply, would we be ok sending it through as a bank cash item collection?

Banks have looked for a silver bullet on this issue for years; there is none. Your only risk management tools are those you use when you accept the item for deposit. You can:
* Attempt to verify the item's authenticity. (Problematic)
* Determine if the customer relationship can support your assumption of risk. If a customer's average balance is $14.27, you will not accept a $4,000 cashiers check drawn on an out of state bank for deposit.

If you send a valid cashiers check for collection they are going to send you a cashiers check just like it in return.

That's true, Ken. But if you checked out the drawee bank's mailing address to ensure you sent it to the right place, you would at least know the provenance of the second cashier's check, and you'd likely feel it's authentic.

That's quite true.

Regardless, I would agree with what is assured to be the customer's view: The exercise was ridiculous. If the bank doesn't like the check, then it shouldn't take the check. If it doesn't like the check, but takes it anyway there's no incremental shame in making the second ridiculous decision and sending it for collection.

"We even called the supposed issuing bank to verify the checks which they did only to send them back as counterfeit anyways."

I'm curious about this statement. Did you call the number on the check that was presented or did you find the bank information from a third party source?