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Check cashing - scam

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P&J

New member
What is the name of your state?TN

When using a check cashing service who is liable when payment is stopped?

This issue has many layers. We have well for our water needs. The water stopped working on Sat and we called someone to come look at it. After checking the current and relay we were told both were working and we needed a new well pump. He stated he would need the cost of the pump and parts up front. We wrote him a check for $1500. He told us he would deposit it into his bank and they would need to call us to verify we wrote it due to the amount. Later that day my husband received a call from “financial services” asking us to verify the check. The service guy did not show on Monday nor did he call. To keep this from being extremely long I will just say after phone calls we determined he did not order the parts and the “bank” was a check cashing business. We stopped payment on the check and the check cashing company is coming after us now! Can they hold us liable siblnce we did not write it to them and they did not identify themselves as a check cashing company? Should we pay them and take the service guy to small claims? I doubt we will get anything from him because he is a liar and a cheat. Just as a side note we got someone else to look at it and it was the relay costing $430 total! We were scammed
 


LdiJ

Senior Member
What is the name of your state?TN

When using a check cashing service who is liable when payment is stopped?

This issue has many layers. We have well for our water needs. The water stopped working on Sat and we called someone to come look at it. After checking the current and relay we were told both were working and we needed a new well pump. He stated he would need the cost of the pump and parts up front. We wrote him a check for $1500. He told us he would deposit it into his bank and they would need to call us to verify we wrote it due to the amount. Later that day my husband received a call from “financial services” asking us to verify the check. The service guy did not show on Monday nor did he call. To keep this from being extremely long I will just say after phone calls we determined he did not order the parts and the “bank” was a check cashing business. We stopped payment on the check and the check cashing company is coming after us now! Can they hold us liable siblnce we did not write it to them and they did not identify themselves as a check cashing company? Should we pay them and take the service guy to small claims? I doubt we will get anything from him because he is a liar and a cheat. Just as a side note we got someone else to look at it and it was the relay costing $430 total! We were scammed
It is typical that check cashing services will try to go after the maker of the check if a stopped payment has been placed on the check. Whether or not they can actually succeed is a matter that has never been proven to me one way or another. I think that they would have to go after the person who cashed the check and that person would have to go after you.
 

Taxing Matters

Overtaxed Member
Can they hold us liable siblnce we did not write it to them and they did not identify themselves as a check cashing company?
Yes, the check cashing company can come after you. You were the maker of the check. The check cashing company is not the party you dealt with and was thus likely a holder in due course of the check. Under the Uniform Commercial Code (UCC) article 3, which has been adopted in every state but Louisiana, the holder in due course of a check or other negotiable instrument can enforce the instrument against the maker and is not subject to any claims or defenses that the maker had against the payee (the guy to whom you wrote the check). This assumes that check cashing company had no notice of any defects or disputes concerning the check when it took the check. Holders in due course have a strong position under the UCC because for the financial system to have confidence in checks and other negotiable instruments they need to be free of the worry that they need to first investigate every check to be sure that there isn't some dispute or claim lurking out there that would make the instrument worthless. You were the one dealing with the scammer and were in the best position to check him out and avoid the problem in the first place. So the rules are set up to put most of the burden on you. Of course the check cashing company may also go after the scammer, too, since his indorsement on the check acts as a warranty that the check is good. So the check cashing firm could try going after either of you, and will likely go after the easiest target to collect.

Should we pay them and take the service guy to small claims?
That unfortunately may be what you'll have to do here.

I doubt we will get anything from him because he is a liar and a cheat. Just as a side note we got someone else to look at it and it was the relay costing $430 total! We were scammed
It often is hard to collect from a scammer. But you can report this to the police if you want. No guarantee they'll do anything about it though.
 

P&J

New member
Thanks for the advice! I was afraid of that. I think it is crazy that someone can hold you responsible for a check when you didn't write it to them.

You never know when someone is going to do something like this. This same guy has done work for us for years and never done anything like this. Of course most of it was small like servicing our heat pump so I guess it wasn't worth the risk to him. We thought he was reputable based on past experience but I guess we learned a $1500 lesson.
 

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