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Postal Money Orders Exempt from Late Return Claims

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We have been expecting to receive some counterfeit Postal Money Orders back in our return cash letter. We had received 1 of 3 a couple of weeks ago. It's now been 2 weeks from the date of deposit. Are Postal Money Orders exempt from late return claims?

Yes, in a sense. The Domestic Mail Manual of the USPS provides the postmaster general a "reasonable time" to review money orders for proper payment, and to make a demand for reclamation in the event of improper payment. However, FRB Circular 3, Appendix B, indicates that such reclamation claims are handled directly between the USPS and the financial institution, not through the Fed.

If the Fed is able to determine that a USPS MO is counterfeit before charging it to the Treasury's general account, it will return it to the depositary bank; otherwise, it's likely that the bank will hear directly from the USPS.

First published on 1/23/12

First published on 01/23/2012

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