Reason for Stop Payment on Cashier's check

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Question:

We had a customer purchase a cashier's check. We have now found out that the check was used to scam our customer. Can we place a stop payment on the cashier's check before the check is received? What reason would we give for the stop payment?

Answer:

Your customer did not sign the cashier's check. He's not the one who ordered the payment, therefore he cannot stop payment.

When your bank's employee signed the check your bank automatically "accepted" it under the UCC. Your bank cannot change its mind about making the payment except under very limited circumstances set out in the UCC. That's why cashier's checks are oftentimes required as a form of payment; the payee knows that he has a commitment from the bank, not the remitter, that the check is good and will be paid on presentment.

First published on BankersOnline.com 6/24/13