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No Car - No Check - Overdrawn: Now What?
Ok, I desperately need some help. I sold a car to a gentleman that paid with a cashier's check made payable to me. I had the teller run the check and verify funds and everything was valid. I deposited the check and let him have the car after notarizing a bill of sale, etc. A couple of days later, the cashier's check was canceled. I called the bank and they said that the gentleman came in and said that there was something wrong with the car (there wasn't) and that he didn't want it so they canceled the check by saying that it was stolen and not cashed in the good faith that it was issued. They left me with no car and no cash. The cashier's check had cleared my bank and it was debited back out, leaving me overdrawn. Can they do this? I assumed that that was the whole reason for requiring a cashier's check, so it couldn't be stopped and you protected yourself from thieves. What is the law here and do I have any recourse? Thanks for any help, it is greatly appreciated.
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 Do you have any recourse? Yes. Will it be a piece of cake? Probably not.
The bank that issued the cashier's check erred when it refused to pay it. Cashier's checks simply cannot be stopped. The bank is still liable to pay the check, and
hopefully you have it in your possession (or can get it from your bank).
You should ask your bank to either credit your account for the amount of the cashier's check and enter a claim against the issuing bank to recover its funds under the Uniform Commercial Code (UCC), or give you the check so that you can do it yourself. The sections of the UCC that deal with this mess are sections 3-411 and 3-412. If the issuing bank refuses to budge, you might need to get an attorney involved, unless you are able to take the case to a Small Claims Court.
Published on BankingQuestions.com 10/30 /06
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