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Check cashing scam

Brickie | Posted in Business on September 20, 2007 05:40am

I want all you business owners to learn what I have the hard way.  Here’s the story:  Employee X is fired and his last check goes in the mail.  Calls the next day and says there was a fire at his apartment and can’t get mail.  Naive boss issues a new check that he picks up and places a stop payment on the “lost” check.  Ex employee cashes reissued check at his credit union AND cashes the “lost” check at a well-known check cashing place.  Check cashing place gets the “lost” check back because of the stop pay order and sends a demand letter asking for repayment.

My attorney confirms that my business owes the check cashing place even though they cashed a check with a proper stop pay order!

What do you guys think of that!


Edited 9/20/2007 10:44 am by Brickie

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Replies

  1. CAGIV | Sep 20, 2007 06:21pm | #1

    I think you got screwed or are being screwed with.

    Check cashing place is coming after you b/c they know you have the money and the other guy does not.

    Depending on the amount of the check I'd make a quick phone call to either your attourney or maybe you have one as a friend?

    I'd probably fight it solely based on principle.

    But principles can cost a lot of money sometimes

    Team Logo

    1. brownbagg | Sep 20, 2007 06:28pm | #2

      have the employee arrested for fraud.Haga su trabajo de fricken

    2. Brickie | Sep 20, 2007 07:37pm | #5

      See, the problem is that you're thinking logically, that's why you don't understand why I'd be stuck paying someone twice while the check cashing place gets to collect a fee without taking risk. 

      Read the articles BillHartmann posted and you'll see why.

  2. User avater
    BillHartmann | Sep 20, 2007 07:25pm | #3

    Looks like you are stuck, with regards to the check cashing place.

    Found 2 identical cases in WA. One with a payroll check and the other with a rent deposit refund.

    http://www.wshla.com/news/info_view.php?id=9

    http://www.rha-ps.com/q_and_a/stop_payment.aspx

    Your only option would be to go after him.

    I would immediately file a small claims court case (before he disapears) and also call the police or DA's office.

    Looking at those case I am thing about how you protect yourself in those cases.

    In the case of your employee tell him to go to the post office to get his mail.

    In general I would say that you can't issue a check for 6 months until the old check becomes stale.

    Or that they could issue a sworn, notorized, statement that they don't have the check and if the check if found that they will return it and that if both checks are chashed that they will be responsible for restitution including all fees and attorneys cost. Also get a copy of the DL (you will already have the SS number) and verified address of 2 next of kind.

    Still no guarantee, but hopefully it will make then thing about what they are doing.

    .
    .
    A-holes. Hey every group has to have one. And I have been elected to be the one. I should make that my tagline.
    1. Brickie | Sep 20, 2007 07:30pm | #4

      Oh, yeah, I know that I'm stuck with this one.  I'd not hesitate to go after this guy, turn him upside down and see what shakes out but knowing how so many of these guys live, he's probably drank or smoked the proceeds of that check and now he's either onto another short term gig with another employer or picking up cans along the highway.  Who knows.

      Your suggestion that they be told to go to the post office is a good one.  Next time.

      1. DougU | Sep 22, 2007 05:30am | #6

        Brickie

        You might try looking at this from a positive point of view - you got rid of a thief and all you lost was a weeks wages. I know thats not the most comforting thing but it could be worse.

        Doug

  3. seb | Sep 22, 2007 05:58am | #7

    Having found this out the hard way about 40 years ago, you are on the hook.
    The check cashing place is what is known in legal terms as "a holder in due course",its not their fault. You be payin unless you get your former employee to pay...
    Bud

  4. User avater
    JeffBuck | Sep 22, 2007 06:30am | #8

    well that sucks!

     

    Jeff

        Buck Construction

     Artistry In Carpentry

         Pittsburgh Pa

  5. JTC1 | Sep 22, 2007 04:54pm | #9

    To answer your question - it sucks.

    If it were me and based on other posts:  The check cashing service would be entitled to the amount of the original check minus their fee - this would be their "damages" since they did not give your ex-employee the full dollar amount of the check. You may be stuck with paying them, but I would certainly argue that their damages are not equal to the full amount.

    As for the ex-employee, I would file criminal charges with the local police. Theft by deception, fraud -- they will know what to call it. I am not real sure that this would be a small claims court matter since criminal activity has occurred.

    Jim

    Never underestimate the value of a sharp pencil or good light.

     

    1. BudFox2 | Sep 23, 2007 01:58am | #10

      What I've always seen done:  Employee gets fired, employee gets handed the last paycheck thru that day.  I think in California you have to do this.  I suppose employee can come back and say he lost the check, but that should set off some alarm bells right away.

      1. CAGIV | Sep 23, 2007 04:28am | #11

        if you issue an employee a final check, can you tell them "sucks to be you" if they say they lost it?

        1. User avater
          BillHartmann | Sep 23, 2007 04:51am | #12

          I think that Wage and Hours would object to that.I would try giving them a notice that the check would be reissued in 6 months after the first check goes staleBut I think that W&H might not like that either.I think that what you could be IN ADVANCE if you think that there might be a problem then only give them the check in person with then signing a receipt and even better have cash so that you can cash it for them on the spot.But if this happens after the fact then reissue the check on the condition that they give an affidavid that they have lost the orginal adn that if they cash the first check that they acknowledge that it is fraund and they are responsible for all cost. And if if someone else cashed the check that they will cooperative in prosecuting the 3rd party.If, for example, they give it to the BIL and he cashes it at the check cashing place then you aren't responsible, but have to prove the signature was forged.I expect that 99.943% person of these minor crooks would "find" the check after having to sign a notice acknowledging that criminal and civil liabilities..
          .
          A-holes. Hey every group has to have one. And I have been elected to be the one. I should make that my tagline.

  6. grpphoto | Sep 23, 2007 06:05am | #13

    Check with your bank. You may actually be able to put a stop pay notice on the second check, in which case the bank goes after your former employee. I don't know exactly how it works, 'cause all I've seen is the warnings about accepting checks, depositing them, and sending product after the check supposedly clears, but it's worth a try. Definitely worth a try if the guy deposited the check in his bank account.

    George Patterson
    1. Brickie | Sep 24, 2007 03:33am | #14

      The whole problem is that he gained the proceeds of the invalid check by going through a check cashing company, not a bank and as mentioned by other posters, they have managed to get favorable laws

      1. User avater
        rjw | Sep 24, 2007 04:00am | #15

        >>they have managed to get favorable lawsThe laws of negotiable instruments and of "holder in due course" status date back to the 1700's.

        May your whole life become a response to the truth that you've always been loved, you are loved and you always will be loved" Rob Bell, Nooma, "Bullhorn"

        "We Live"  http://www.youtube.com/watch?v=7kuBgh0VCqI&mode=related&search

        And Annie Ross's "Twisted" http://www.youtube.com/watch?v=8lqivrCIRGo&mode=related&search=

         

        1. DonK | Sep 24, 2007 04:39am | #17

          Some of the laws may be old, but the way they are being used and abused today is ridiculous. One example - 95% of banks won't touch a third party check. The days of "negotiable" instruments are numbered, at least as far as checks are concerned. Computer payments will hasten the demise. 

          Even the situation raised by the poster sucks. Where's the fairness in that? (Rhetorical question.)

          Don K.

      2. grpphoto | Sep 24, 2007 04:39am | #16

        I understand that, but your may be able to stop payment on the second check and recover that one. As far as I'm concerned, it doesn't matter which one you get your money back on, as long as you can get your money back on one.George Patterson

        1. User avater
          BillHartmann | Sep 24, 2007 06:47pm | #24

          In normal circumstance it might be a week or two ir before he finds out that the second was cashed. And the 2nd check cashed long ago.And even if he waited 2 weeks to issue the 2nd check and the crook was smart enough he would just wait to cash that one AFTER he cashed the 2nd check..
          .
          A-holes. Hey every group has to have one. And I have been elected to be the one. I should make that my tagline.

  7. jeffwoodwork | Sep 24, 2007 04:47am | #18

    Call him up and play stupid. Tell him that you fired him in haste and would really like if he could come back and work for a week as you are swamped.  So swamped that your months behind in your books.  If comes back to work get a week out of him and at the end say so sorry look like I already paid you.  Of course I know that is a far shot but you never know.

    1. brownbagg | Sep 24, 2007 04:50am | #19

      why not just go over to his house, take the wheels off and push it over on it side..Haga su trabajo de fricken

      1. User avater
        SamT | Sep 24, 2007 05:07am | #20

        ROARSamT

      2. BUIC | Sep 24, 2007 05:27am | #21

         FINALLY a sensible solution!

          Remind me never to tick you off...buic

      3. User avater
        Heck | Sep 24, 2007 05:30am | #22

        really no need to take the tires off the roof, just push it over.                        

    2. Brickie | Sep 24, 2007 05:31pm | #23

      Looks like we think alike - I did just that but he's no where to be found.  His phone is not in service and the union doesn't know his whereabouts either, but I would've pulled that one on him if I could. 

       

      Edited 9/24/2007 7:31 pm by Brickie

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