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Can cashier’s checks be converted to ACH?

Question: 
We paid an ARC entry that was created from our cashier’s check. We’re concerned the original check might also be presented. Can we stop payment on the check?
Answer: 

A bank cannot stop payment on its cashier’s check, but it can return the ARC entry using an R10 return code for lack of authorization and because it’s not an Eligible Source Document for conversion. If the business was smart and retained the original, it can present it for payment as it should have the first time around. If the business destroyed the check after converting it, it can use the process for reimbursement provided by UCC section 3-312 (Lost, Destroyed, or Stolen Cashier’s Check, Teller’s Check, or Certified Check), but only if it was the payee of the check.
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Learn more about John Burnett’s webinar Managing Unauthorized ACH Items

First published on 10/20/2019

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