True Story: A company mailed a check to one of its suppliers in payment for services. The check never arrived. The company placed a stop payment order on the check and issued a new one, which was cashed by the supplier in the normal course. All good? Not quite.

Seven months later the original check was cashed by an unknown person who took it to another bank, scribbled a signature on the back, and collected the face amount of the check. The issuing company saw the check on their bank statement and reported it to their bank, pointing out the stop payment order and the stale date on the check, and requesting reimbursement.  The bank advised the company that they have no obligation to check for or honor their own stale dated check policy, but they are scrupulous about honoring the stop payment order expiration (both 6 months in theory). The company agrees to fill out the forms the bank required to document the loss, including a notarized signature. The company is advised they can expect reimbursement in 2-3 weeks.

Six weeks later in a follow up call the company is told the bank employee taking the report checked the wrong box on the form, and a replacement form must be completed before the claim can be processed. The company duly submits the revised form and waits some more, wondering what else can get in the way of getting reimbursed for the bank’s error.

Following up more closely after two more weeks, the company is told that the bank will now also need a form signed by the intended payee – the original supplier – that they didn’t get and cash both checks fraudulently. Upon receiving that form, with notarized signature, they may agree to issue a “provisional credit,” which means the bank will lend the company their own money while they, the bank, attempt to collect from the other bank, who has also implemented their own policies to keep the money they paid out in error.

As it stands today: after several months, the only entity out any money is the only entity that did it all right. Stay tuned to learn what else their bank can come up with to stall their reimbursement obligation. EMAIL  TO REQUEST THE NAME OF THE BANK IN QUESTION.

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