Doctor cashed postdated check and caused financial hardship

[Donnamans]

What is the name of your state (only U.S. law)? Washington
A dentist office told me to write a postdated check and they would not cash it for two weeks so I could have some dental work done. They cashed it immediately, caused $200 insufficient funds fees besides overdrawing my account, and just laughed when I told them what they had done. He said, "So, sue me." Obviously, I'm not going back. My bank and his bank both told me that he basically stole the money and that it was immoral and unethical. But, he refuses to even discuss the matter with me. Should I take him to small claims court?

 

[Zigner]

What is the name of your state (only U.S. law)? Washington
A dentist office told me to write a postdated check and they would not cash it for two weeks so I could have some dental work done. They cashed it immediately, caused $200 insufficient funds fees besides overdrawing my account, and just laughed when I told them what they had done. He said, "So, sue me." Obviously, I'm not going back. My bank and his bank both told me that he basically stole the money and that it was immoral and unethical. But, he refuses to even discuss the matter with me. Should I take him to small claims court?

For what? You shouldn't write checks for money you don't have. If you would have had the money in two weeks, you should have waited two weeks.

 

[Antigone*]

What is the name of your state (only U.S. law)? Washington
A dentist office told me to write a postdated check and they would not cash it for two weeks so I could have some dental work done. They cashed it immediately, caused $200 insufficient funds fees besides overdrawing my account, and just laughed when I told them what they had done. He said, "So, sue me." Obviously, I'm not going back. My bank and his bank both told me that he basically stole the money and that it was immoral and unethical. But, he refuses to even discuss the matter with me. Should I take him to small claims court?

There is only one way to protect yourself when writing a post-dated check. You need to place a stop payment on the check and then have the stop payment removed on the day you want to allow the check to pay.

Chances of you winning in small claims court are slim and none ~ the dentist did nothing illegal and you could have mitigated your damages by placing the stop on your post-dated check

Sorry, ana

 

[Donnamans]

Dentist cashed post-date check

Thank you for your replies - I know. I have to learn not to be so trusting.

 

[justalayman]

Actually, you do have recourse but not because the bank cashed the check. This is the rule on post dated checks:

Section 4-401(c) of the Uniform Commercial Code (check your state's version of the UCC) provides the following:

(c) A bank may charge against the account of a customer a check that is otherwise properly payable from the account, even though payment was made before the date of the check, unless the customer has given notice to the bank of the postdating describing the check with reasonable certainty. The notice is effective for the period stated in Section 4-403(b) for stop-payment orders, and must be received at such time and in such manner as to afford the bank a reasonable opportunity to act on it before the bank takes any action with respect to the check described in Section 4-303. If a bank charges against the account of a customer a check before the date stated in the notice of postdating, the bank is liable for damages for the loss resulting from its act. The loss may include damages for dishonor of subsequent items under Section 4-402.

Note that the text says that the bank may charge the account. The only limitation on the bank's right to charge the account is a notice from the customer that the check is postdated. The language was added to the UCC to recognize the fact that banks do not check dates in today's automated check-processing environment. That said, if a bank does take notice of the post-dating of a check, such as at a teller window, it may refuse to honor the check because of the date. That circumstance is not described in the law and one cannot infer that a bank must check dates at the teller window

So, if you had given your bank actual notice, they would not have been able to legally clear your check. I suspect you did not give your bank notice so the bank is not guilty of any wrongdoing and not liable for your injuries.

Now, where you do have an actual claim is; it appears the dentist office entered into a contract with you to hold the check until the actual date on the check. Since they did cash the check, they are liable for all of your injuries such as the overdraft fees so, yes, you should take him to small claims court.

You may not win but in all fairness, you should.

so, to wirelessany, there is legal protection as long as you follow the proper procedure. There was no reason to place a stop order on a check and actually by placing such an order on a check borders on illegal actions. Once you issue a check, any effort to rescind that payment may be seen as a variety of crimes. On top of that, it costs me $35 to stop payment on a check. Not something I would be willing to do, especially since there is a way to disallow payment until the actual issue date written on the check.

Additionally, if the check is presented and there is a stop payment in place, the check will be returned. It may or may not be presented again for clearing but it does not set at the payors bank waiting for the stop payment to be lifted.

 

[Antigone*]

so, to wirelessany, there is legal protection as long as you follow the proper procedure. There was no reason to place a stop order on a check and actually by placing such an order on a check borders on illegal actions. Once you issue a check, any effort to rescind that payment may be seen as a variety of crimes. On top of that, it costs me $35 to stop payment on a check. Not something I would be willing to do, especially since there is a way to disallow payment until the actual issue date written on the check.

Additionally, if the check is presented and there is a stop payment in place, the check will be returned. It may or may not be presented again for clearing but it does not set at the payors bank waiting for the stop payment to be lifted.

The stop payment would prevent the payee from cashing it early. The stop payment should be removed on the day you promised to make it good. If you want to write a post-dated check and need to be assured that the check will not clear, then your 20, 30 dollar fee whatever, is worth the peace of mind. It is not illegal if the stop is removed on the date promised.

We have to remember that a check is merely a promise to pay. Your verbal agreement with the payee is to turn the funds over on a certain day. There is nothing illegal from placing the stop until the date of the check.

I could understand you not wanting to pay for a stop payment fee, I wouldn't either; but then again, I don't write post-dated checks. I see the havoc they can create.

Oh by the way...that notice to the bank that the UCC code is talking about...that's a stop payment.

 

[justalayman]

=Wirelessany1;2169559]The stop payment would prevent the payee from cashing it early. The stop payment should be removed on the day you promised to make it good. If you want to write a post-dated check and need to be assured that the check will not clear, then your 20, 30 dollar fee whatever, is worth the peace of mind. It is not illegal if the stop is removed on the date promised.

Not correct. If you place a stop order, the check would be presented, stamped with "STOP PAYMENT ORDERED" or other similar verbiage and returned to presenter. It will not be presented again with that on the check.

We have to remember that a check is merely a promise to pay. Your verbal agreement with the payee is to turn the funds over on a certain day. There is nothing illegal from placing the stop until the date of the check.

Not correct. A check is a negotiable instrument. Once it is issued, it is negotiable. The only way to force the post date to be honored is to act as I stated.

I could understand you not wanting to pay for a stop payment fee, I wouldn't either; but then again, I don't write post-dated checks. I see the havoc they can create.

Not if you act properly.

Oh by the way...that notice to the bank that the UCC code is talking about...that's a stop payment.

Oh, by the way, no it is not. It refers to the timeline for stop orders as the same timeline required for a post dated instrument to be legally required to be honored in the manner you intended by your bank. Read what I quoted again with special attention to this:

bank may charge against the account of a customer a check that is otherwise properly payable from the account, even though payment was made before the date of the check,(post dated)(my note) unless the customer has given notice to the bank of the postdating describing the check with reasonable certainty. The notice is effective for the period stated in Section 4-403(b) for stop-payment orders,

notice:U.C.C. - ARTICLE 4 -§4-401.

and U.C.C. - ARTICLE 4 -§4-403.

 

[Antigone*]

I am not going to get in a pi$$ing match with you Just. I do stand by my adivce to the OP and anybody else who is stupid enough to post date a check.

If they want to safeguard their own account from the payee cashing the check earlier than promised and wrecking havoc, they must place a stop payment on the check. If the person who promised to hold onto the check does not abide by the agreement, then in all certainty that check will be returned if deposited early. On the day they have agreed, it is the responsibility of the check writer to call the bank again and remove the stop. If they don't, the bank will return the check when it is presented by the payee ~ and then if all hell breaks loose it is on the check writer to pay the consequences.

I spent 7 years in operations prior to going into commerical banking. I have a clear understanding of the UCC code as it pertains to my field.

Just to clear things up in case there is any more doubt. Take it straight from another banker's keyboard.

BankingQuestions.com - Can Bank Process Post-Dated Check Early?

take care, ana

 

[justalayman]

well, your link doesn't work but thanks anyway. I have my own information available directly from bankers and the UCC.

this is very telling of your position though:

and then if all hell breaks loose it is on the check writer to pay the consequences.

In your way, that is the possibility. In my way, this is not going to happen. You are chancing, no, gambling, that things will work as you design. I am following the laws as written to attain the same result with no gambling involved. In fact, not only am I not gambling, my directions will result in the payors own bank being liable for damages should they not abide by the post-date agreement.

as I said, your directions can result in criminal actions charges on the writer. Not a good bit of advice in my opinion. The intent is to protect the writer, not get them tossed in jail for trying to do things properly but hey, since you are a high falootin banker, the best to ya. Just remember; the country is in the situation it is in as a very direct result of the bankers in this country. They are the cause for about 3 million folks being out of work. Thanks.

just one other note; it is great when you do not have to post date a check and I hope you never do BUT, there are many folks living on the edge and post dating a check is the only way to receive services they have to have now. Many of them would wait if they could but sometimes situations do not allow them to wait and they do not have access to loans to pay for emergency situations. That is why we have the vultures known as the pay day loan business. I would much rather teach a person how to properly write and control a post-dated check then offer them advice that could wind up with them fighting criminal charges or subject to the ridiculous fees (truly; interest) from the pay day loansharks.

Hey, I got the link to work. It's really kind of funny. The link you posted advises to do exactly what I said, not you. HHmmm. Makes you wonder.

here is the answer posted:

Yes, the bank may charge your account without regard to the date on the check. Banks don't check dates on most checks, unless the customer who writes a post-dated check contacts the bank and requests that a specific post-dated check not be paid until the date that appears on it.

If you tell a bank that you've issued a post-dated check that you don't want paid early, your request has the effect of a short-term stop payment, and the bank may impose its normal stop payment fee, but if you don't tell the bank about the date on the check, the bank can ignore the date and pay the check. That can cause other checks you may have written to create overdrafts and overdraft fees.

 

[Antigone*]

Please enlighten me Justalayman. Please help me correctly inform all the post-dated check writers out there.

What is the process the bank would take when you call them and tell them that you've written chk# 101 for $10,000 and you don't want it to pay until March 1?

 

[justalayman]

the process most of them will start with is; sorry but we do not check the dates on checks so we cannot guarantee it will not be cleared.

It seems either the bulk of the bank employees that deal with the general public are ignorant of the banking regulations or are trying to BS their customers into believing their is nothing the bank can do, let alone be held liable for failing to do what is requested.

Obviously, this does not release them from their legal liability of holding the check without clearing it.

Then, they will tell the customer the only way to do this is to put a stop payment on the check. Again, this is apparently because of their ignorance. They should place a hold rather than a stop payment just like some banks do with customers (generally very good and well known customers) that write checks without the funds to process the check and then call the customer and inform them and give them the opportunity to fund the account. Any bank I have dealt with does have a "hold" that can be placed rather than a "stop payment". Very big and critical difference. If a check is presented with a "stop payment" in place, the check will not be held. It will be stamped with big letters that say "payment refused" or something similar. Sometimes they even have little squares with different options that get checked to indicate which of the options was the reason for the payment refused statement. The check will then be reversed to the bank that presented it for clearing and on and on until it reaches the person that presented the check for clearing and then handed to him/her. THEN, that person can do a couple things;
1. find the issuer and ask "why?"
2.find that person and kick their butt.
3. call the police and report it. It is illegal to stop payment on a check that has been issued, in general.

the one thing they cannot do is re-present the check for clearing. No bank will accept a check once it is stamped with "stopped payment" or "payment refused".

as to what the exact mechanism is; I don;t care. I do know what the law says is required of a bank. How they get to that point makes no difference to me nor this conversation.

You are simply attempting to show how much you know about the banking process so if you want, go ahead and tell me. It still doesn't alter my position nor does it cause me to be incorrect in my position.

just for fun, here is Michigans law concerning bad checks and INTENT:

750.132 Evidence of intent.

Sec. 132.

Evidence of intent to defraud, etc.—As against the maker or drawer thereof, the making, drawing, uttering or delivering of a check, draft or order, payment of which is refused by the drawee, when presented in the usual course of business, shall be prima facie evidence of intent to defraud and of knowledge of insufficient funds in or credit with such bank or other depository, provided such maker or drawer shall not have paid the drawee thereof the amount due thereon, together with all costs and protest fees, within 5 days after receiving notice that such check, draft or order has not been paid by the drawee.

See that? The simple act of refusing payment on the check is considered to be an intent to defraud in the state of Michigan. Now, do you really want to continue to tell people to issue a stop payment on checks they do not want to clear due to them being post dated? I think it is a bit irresponsible to maintain that position, especially since I have given you proof that such an act is enough to cause criminal implications.

 

[Antigone*]

the process most of them will start with is; sorry but we do not check the dates on checks so we cannot guarantee it will not be cleared.

It seems either the bulk of the bank employees that deal with the general public are ignorant of the banking regulations or are trying to BS their customers into believing their is nothing the bank can do, let alone be held liable for failing to do what is requested.

Obviously, this does not release them from their legal liability of holding the check without clearing it.

Then, they will tell the customer the only way to do this is to put a stop payment on the check. Again, this is apparently because of their ignorance. They should place a hold rather than a stop payment just like some banks do with customers (generally very good and well known customers) that write checks without the funds to process the check and then call the customer and inform them and give them the opportunity to fund the account. Any bank I have dealt with does have a "hold" that can be placed rather than a "stop payment". Very big and critical difference. If a check is presented with a "stop payment" in place, the check will not be held. It will be stamped with big letters that say "payment refused" or something similar. Sometimes they even have little squares with different options that get checked to indicate which of the options was the reason for the payment refused statement. The check will then be reversed to the bank that presented it for clearing and on and on until it reaches the person that presented the check for clearing and then handed to him/her. THEN, that person can do a couple things;
1. find the issuer and ask "why?"
2.find that person and kick their butt.
3. call the police and report it. It is illegal to stop payment on a check that has been issued, in general.

the one thing they cannot do is re-present the check for clearing. No bank will accept a check once it is stamped with "stopped payment" or "payment refused".

as to what the exact mechanism is; I don;t care. I do know what the law says is required of a bank. How they get to that point makes no difference to me nor this conversation.

You are simply attempting to show how much you know about the banking process so if you want, go ahead and tell me. It still doesn't alter my position nor does it cause me to be incorrect in my position.

just for fun, here is Michigans law concerning bad checks and INTENT:




See that? The simple act of refusing payment on the check is considered to be an intent to defraud in the state of Michigan. Now, do you really want to continue to tell people to issue a stop payment on checks they do not want to clear due to them being post dated? I think it is a bit irresponsible to maintain that position, especially since I have given you proof that such an act is enough to cause criminal implications.

Well Just, my friend I know that you are the consummate instigator ~ and even knowing that I still let you get me. I stewed about this all weekend because I have been away from operations for some time.

You did win in one sense because you had me thinking about this stupid post all weekend; but I do have the peace of mind that my adivce is still correct.

If my best client called the bank wanting to "hold" a post-dated check. Guess what it would be a stop (call it short-term ~ call it long-term ~ it is still a stop) and on the date the check is good, it could be released. The bank cannot hold items ~ it is either pay or return on the day they are presented.

Peace ~ ana

 

[justalayman]

Well Just, my friend I know that you are the consummate instigator ~ and even knowing that I still let you get me. I stewed about this all weekend because I have been away from operations for some time.

You did win in one sense because you had me thinking about this stupid post all weekend; but I do have the peace of mind that my adivce is still correct.

If my best client called the bank wanting to "hold" a post-dated check. Guess what it would be a stop (call it short-term ~ call it long-term ~ it is still a stop) and on the date the check is good, it could be released. The bank cannot hold items ~ it is either pay or return on the day they are presented.

Peace ~ ana

well, you'll have to stew some more becuase MY bank will hold a check if I post date it. I actually called them to make sure. It is not a stop payment in fact but I will agree it is a stop payment in effect, but limited.

it is either pay or return on the day they are presented.

Hold on there. You just said in this same post:

it is still a stop) and on the date the check is good, it could be released

It surely can't be both ways. Even you must recognize that. If a check is returned stamped "stopped payment" no bank with any scruples or sense will accept it again. You have now caused inconvenience to both the payor and payee because another check will have to be issued.

here is something from the same site you cited previously:

Stop Pay on a Post Date Check
Question: Should a bank employee take a stop payment order from a customer if
the check is post dated?
Answer by John Burnett:
In a word, Yes.
For such a check, the account holder can either announce his intention that the
check not be paid until its date, or place a stop payment order. In most banks, a
stop payment record is used for both.

Notice, it does not state the maker must place a stop payment on the check. They can simply make the notification that it is a post dated check and do not want it paid until the date is current. Yes, it states most, MOST banks; a stop payment record it used but guess what, that means not all banks use it so obviously it is not the only way for the bank to take this action but that is an internal matter for the bank and their specific processes and terminology.

continuation of the answer:

If the customer merely says, "I wrote a post-dated check and I don't want it paid
until its due date," the bank must follow that instruction, and return the check for
date if presented before the check date. On or after the check date, the bank will
treat it like any other check and pay it, all other things being equal. The check
date can be as far out as six months when the customer request is taken.
But if the customer says, "I wrote a check that's post-dated and I don't want you
to pay it, ever!" the bank has a stop payment order that's valid for six months,
and the bank should return the check marked "Payment Stopped."

the check will be returned to the payee and marked with some verbiage indicating it is a post dated check as long as the payor does not actually stop payment on the check. Therefore, there is a hold on the check until the date is current


the hold is not a physical hold but merely a hold on clearing the check. Maybe that is where you are getting confused.

If the payor actually issues a stop payment, that is what is going to get stamped on the check and it will not be eligible for presentation again. Oh, that's right, you said:

. On the day they have agreed, it is the responsibility of the check writer to call the bank again and remove the stop. If they don't, the bank will return the check when it is presented by the payee ~ and then if all hell breaks loose it is on the check writer to pay the consequences.

Again, you are wrong. Once a post dated check notification is made to the payors bank by the payor, it does not need be rescinded since it is a notification that the check in question is a post dated check and they do not want it cleared until the date is current. When the check it presented again, as long as it is beyond the date on the check, it will simply be cleared. If presented again before the date is current, it will simply be returned, again, indicating it was returned for the date. Still not a stop payment so the check can be presented again but obviously, if a person attempts to present a check with a date still post of the current date and with markings it has been returned once for that reason, the payees bank will simply refuse to accept it until the date is current.

and here you are blaming the payor for the the problems that could happen if the payor fails to release the stop payment when in reality, there is no need when dealt with in the proper method.





Did you even read the info from the state of Michigan I provided? Stopping payment on a check is proof of intent to defraud. They don't say stopping payment is considered when trying to determine proof or part of a cumulative investigation into fraud; it is proof itself or as they put it:

payment of which is refused by the drawee, when presented in the usual course of business, shall be prima facie evidence of intent to defraud

. So now, at least in Michigan, if a person follows your advice, they may be looking at the prosecutor from across the table.

 

[Mr. Fusion]

Doctor cashed postdated check

First, the Uniform Commercial code has two relevant sections for you. The UCC is an agreement by all 50 States, DC, and most US territories. It governs banking procedures and most States have identical Statutes.

1) Contrary to many people believe and most bank employees will tell you, it is not illegal to write a post dated check.

Article 3 of the UCC states:

§ 3-113. DATE OF INSTRUMENT.

(a) An instrument may be antedated or postdated. The date stated determines the time of payment if the instrument is payable at a fixed period after date. Except as provided in Section 4-401(c), an instrument payable on demand is not payable before the date of the instrument.
( Uniform Commercial Code - Article 3 )

Therefore, the Dentist should not have cashed the check early.

2) Then there is4-401. This basically lets your bank off the hook for any damages for accepting a post dated check.
( Uniform Commercial Code - Article 4 )

Then, we have the back up Supreme Court case of Barnhill v Johnson where the Court wrote,

<blockquote>...receipt of a check gives the recipient no right in the funds held by the bank on the drawer's account. ...</blockquote>

If you suffered damages because the Dentist cashed the check before the due date, then, in effect, they altered the check. This counts as fraud and usually qualifies you for treble damages.

In short, the payee (who the check is made out to) did not have any right to the money until the check was due. If your bank charged enough to make it worthwhile, you might try small claims court against the Dentist.

 

[justalayman]

I hesitate getting in to this again but 4-401 does not absolve the bank from liability for damages. In fact, it actually makes the bank liable if the section is applicable.

(c) A bank may charge against the account of a customer a check that is otherwise properly payable from the account, even though payment was made before the date of the check, unless the customer has given notice to the bank of the postdating describing the check with reasonable certainty. The notice is effective for the period stated in Section 4-403(b) for stop-payment orders, and must be received at such time and in such manner as to afford the bank a reasonable opportunity to act on it before the bank takes any action with respect to the check described in Section 4-303. If a bank charges against the account of a customer a check before the date stated in the notice of postdating, the bank is liable for damages for the loss resulting from its act. The loss may include damages for dishonor of subsequent items under Section 4-402.

From the OP's description of the situation, I presume they did not inform the bank of the post-dated check as required by the UCC to invoke the previous cited section so, in this case, if the OP failed to give notice to the bank, there would be no liability on the banks part BUT that is the only reason the bank is not liable in this situation.

If you suffered damages because the Dentist cashed the check before the due date, then, in effect, they altered the check. This counts as fraud and usually qualifies you for treble damages.

that is a bit of a stretch, don't ya think? Unless the action was done with intent to defraud or malice, I don;t see any such claim. The fact is, the office simply deposited the check. If they assumed the bank would simply hold it until such time it was dated for, the dentists office is not guilty of any wrongdoing. Proving fraud is going to be a bit tougher than simply making such a statement.