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Question about lost checks.

S

Sukhoi

Elite Member
Person A writes a check to person B. Person B writes "for deposit only" on the check, doesn't sign it, and loses it. Person A calls bank to notify about lost check, and bank states that a stop payment order for the check is $25.

If someone forges person B's signature and deposits the check isn't the bank liable for the money? I don't see why the bank would try to charge $25 for a stop payment order when they're liable for the amount of the check. Even if the check was signed isn't the bank still liable since they didn't verify the identity of the person depositing the check?
 
You have to remember that banks make their money for charging money for everything that they do. If they could charge you for breathing air standing in line for a teller or an ATM, they would.
 
AFAIK, you're liable/responsible because you lost the check.

Edit: If the check had been written 'for deposit only', then it should only be deposited..regardless of whether or not it was signed.
 
Originally posted by: Homerboy
why should the bank do it for free?
Click to expand...

Am I correct that the bank is liable for the amount of the check if the check is illegally deposited, especially through forgery of the signature? If so, person A is really doing a favor by notifying the bank of the lost check so the bank can attempt to intercept it at the time of deposit.

If person A were to do nothing and the check is deposited can't person A just tell the bank to go check the signature on the check, find out it doesn't match the signature of person A on record, and person A gets his money back?
 
Nope, most of those little tricks people do with checks are not legally defined and do not need to be followed. Such as, writing VOID on a check does not really make it void, IIRC. Look up federal regulation C relating to financial laws, I believe that reg C is the one that deals mostly with checks. Furthremore, it is your resposibilty to ensure that items you are depositing are valid and endorsed properly, not that banks in 99% of the cases you will encounter. The laws are very much written to favor the banks.
 
Originally posted by: CadetLee
AFAIK, you're liable/responsible because you lost the check.

Edit: If the check had been written 'for deposit only', then it should only be deposited..regardless of whether or not it was signed.
Click to expand...

It would be person B that is responsible for losing the check, not the account holder.
 
Not only do they charge ~$25 to stop payment, they also only stop payment for a very short amount of time. Then you have to keep renewing the stop payment order (for a fee of course) for all of eternity.

And why would person A care? It is person B's problem. Person A did all he/she needed to do when the check was given to person B. From then on, it is person B's loss.
 
Originally posted by: The Pentium Guy
What if you give a check to person X.
X loses check. Asks you for another one. You'd lose out $25 on that, cancelling out your check.
Click to expand...
You never, ever write another check. Person X lost the money that the check was written for. Case closed.

If it was cash instead, and person B lost the cash, should person A send more cash? No.

If it was a barter instead, and person B lost the trade item, should person A send another item? No. A check isn't any different.
 
Originally posted by: The Pentium Guy
What if you give a check to person X.
X loses check. Asks you for another one. You'd lose out $25 on that, cancelling out your check.
Click to expand...

Then you tell X to go pound sand instead of writing him another check.
 
Ok, so lets say the "for deposit only" actually means nothing.

Doesn't the fact that a forged check is deposited/cashed mean person A isn't liable for the amount of the check? Isn't the bank supposed to verify the signature on the check?
 
Originally posted by: Sukhoi
Ok, so lets say the "for deposit only" actually means nothing.

Doesn't the fact that a forged check is deposited mean person A isn't liable for the amount of the check?
Click to expand...
Please clarify, was person A's signiture real and B's signiture forged? Or was it A's forged and B's real?

If A was forged, then there is a problem for person A.
If B was forged, then person A is in the clear. Person A can forget about it and never worry.
 
Originally posted by: Sukhoi
Ok, so lets say the "for deposit only" actually means nothing.

Doesn't the fact that a forged check is deposited mean person A isn't liable for the amount of the check?
Click to expand...

why would the bank be liable in anyway shape or form?

It's real simple. It's person Bs loss for losing the check and only he realizes that loss. Get it? Lost check is a loss.
 
Just putting DEPOSIT ONLY doesn't really mean much with an account number.

Plus, the bank did not lose the check, so why should they waive a posted fee.

However... I think that if the bank charged for a stop check order and the check was fradulantly cashed, the initial issuer should not be held liable for the amount of the check.
 
Originally posted by: dullard
Originally posted by: Sukhoi
Ok, so lets say the "for deposit only" actually means nothing.

Doesn't the fact that a forged check is deposited mean person A isn't liable for the amount of the check?
Click to expand...
Please clarify, was person A's signiture real and B's signiture forged? Or was it A's forged and B's real?

If A was forged, then there is a problem for person A.
If B was forged, then person A is in the clear. Person A can forget about it and never worry.
Click to expand...

Yes the person that wrote the check (person A) was legit, and person B's signature was forged in order to deposit/cash the check. Then shouldn't the cashing bank be liable for the money?
 
Originally posted by: dullard
Not only do they charge ~$25 to stop payment, they also only stop payment for a very short amount of time. Then you have to keep renewing the stop payment order (for a fee of course) for all of eternity.

And why would person A care? It is person B's problem. Person A did all he/she needed to do when the check was given to person B. From then on, it is person B's loss.
Click to expand...

That depends on the bank. We place a stop for either three or six months..I can't recall. After that period of time, the check is void anyway.
 
Originally posted by: Sukhoi
Originally posted by: dullard
Originally posted by: Sukhoi
Ok, so lets say the "for deposit only" actually means nothing.

Doesn't the fact that a forged check is deposited mean person A isn't liable for the amount of the check?
Click to expand...
Please clarify, was person A's signiture real and B's signiture forged? Or was it A's forged and B's real?

If A was forged, then there is a problem for person A.
If B was forged, then person A is in the clear. Person A can forget about it and never worry.
Click to expand...

Yes the person that wrote the check (person A) was legit, and person B's signature was forged in order to deposit/cash the check. Then shouldn't the cashing bank be liable for the money?
Click to expand...

The check was deposited or cashed? Significant difference.
 
Originally posted by: CadetLee
Originally posted by: Sukhoi
Originally posted by: dullard
Originally posted by: Sukhoi
Ok, so lets say the "for deposit only" actually means nothing.

Doesn't the fact that a forged check is deposited mean person A isn't liable for the amount of the check?
Click to expand...
Please clarify, was person A's signiture real and B's signiture forged? Or was it A's forged and B's real?

If A was forged, then there is a problem for person A.
If B was forged, then person A is in the clear. Person A can forget about it and never worry.
Click to expand...

Yes the person that wrote the check (person A) was legit, and person B's signature was forged in order to deposit/cash the check. Then shouldn't the cashing bank be liable for the money?
Click to expand...

The check was deposited or cashed? Significant difference.
Click to expand...

This is just theoretical, the check is only missing right now. If something happens it would likely just be deposited unless the bank allows the person to bypass the "for deposit only" written on the check and cash it.
 
Originally posted by: Sukhoi

This is just theoretical, the check is only missing right now. If something happens it would likely just be deposited unless the bank allows the person to bypass the "for deposit only" written on the check and cash it.
Click to expand...

I would tell person B that they need to cover the 'stop check' fee. otherwise they are SOL if someone else cashes it. They lost it, they need to pay for it.
 
Originally posted by: Sukhoi
Yes the person that wrote the check (person A) was legit, and person B's signature was forged in order to deposit/cash the check. Then shouldn't the cashing bank be liable for the money?
Click to expand...
No, person B is liable for the money. Person A got his item and the check was properly written. Person A is done. No need for person A to worry about B losing the money. It is up to Person B to fight the forgery and get the money.
 
If it's deposited fraudulently (and if it can be proven), it's easy enough to pull funds back out. Police report would be a good first step.

Originally posted by: KarenMarie
Originally posted by: Sukhoi

This is just theoretical, the check is only missing right now. If something happens it would likely just be deposited unless the bank allows the person to bypass the "for deposit only" written on the check and cash it.
Click to expand...

I would tell person B that they need to cover the 'stop check' fee. otherwise they are SOL if someone else cashes it. They lost it, they need to pay for it.
Click to expand...

:thumbsup:
 
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