We made a $10,000 cashier's check for a customer for the purchase of a home. Now, the customer came in today and wanted to put a stop payment on it because the transaction is fraudulent. The house is condemned and really never was for sale. However, the check is now trying to clear today. We don't put stop payments on cashier's checks, per UCC. However, any advice in this instance? Do we have to let the check clear and then the customer is responsible for taking the person to court or somehow getting the funds back? If you can provide any insight, I would appreciate it.

Nothing the Bank can do but advise the customer to contact an attorney and/or law enforcement. If you return the cashier's check, the bank of first deposit can come back to you for wrongful dishonor. You do not want to be in the middle of this one.

yes

We contacted the other bank's fraud department and they will honor us sending it back. However we are going to hold out until we get the funds back to credit our customer, to be sure they're not pulling a fast one.

These steps may leave your customer whole and in the clear, but it does not get the bank off of the hook with the payee, should the payee choose to enforce a claim against your for the cashier's check.

Trying to make a claim against the bank may cause the payee to expose their own shenanigans on the house transaction, so they may or may not push hard. So you might make out ok, depending on how risky fighting would be for the payee.

Echo: You are agreeing to step into the customer's shoes in a fight that is not your own. The amount of your potential liability is not limited to the amount of the check.