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Depositing for Another Doesn't Work
I deposited a payroll check that was not mine into my checking account via the ATM. I have deposited close to 30 into the same account over the last year that were not made out to me and it has never been a problem, so when a friend asked me if I could help a friend of his by depositing his paycheck, I didn't have any reason to think this time would be any different.
I paid the person his money and then about four days later, the check came back and overdrew my account. I contacted the employer who wrote the check and he wont talk to me, and the friend that asked me can't locate his friend because of a recent move. Am I stuck paying the check even though I already paid the guy his money? The employer gets to keep the money or the guy does if the employer contacts him and thinks they owe him another check since the first one was returned. Why does the person trying to help someone out always get the bad end of the deal?
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 When you deposited the check to your account, you became liable for the check if it bounced. You do have a right to try to collect from the employer, however, if you are able to establish contact there. If you can't get the employer to buy the check back from you, and can't locate the friend of a friend for whom you cashed the check, you might be able to bring a small claims action against the employer to get your money.
Cashing checks for friends and strangers can be a risky business. There is a reason that check cashing businesses charge such high fee for their services -- their losses on bad checks are high, and they need to make a profit. You are not in business to cash checks, and you should not be taking on the risks. In the future, resist the urge to be so helpful, now that you understand better the risks involved.
Published on BankingQuestions.com 8/20/08
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