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Two Bad Checks Have Stopped Business Cold
My wife has an incorporated business. A client of hers personally deposited a check into her business account in another state for some merchandise. A day later her online account showed check cleared, so she went to the bank and they gave her a cashier's check for the amount of the check with which she paid her supplier.
Four days later the same client deposited another check in the same out-of-state branch and the next day her bank showed check cleared, so she repeated the above process. Now, five days later, the bank is saying that both checks bounced and they are threatening her with a fraud case and demanding their money back which she does not have anymore.
They have frozen her business account and my personal account which was my joint account with her and was somehow linked to her business account. She did nothing wrong. She just relied on the bank's information to go through the transaction. She had filed a criminal police report against the client. Her business has come to a standstill because of all this. What are her options?
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 The fact that a bank shows deposited funds as available for withdrawal does not in any way guarantee that a deposited check has even reached the bank it's drawn on, let alone that the check has been paid. The only parties that can say for certain whether a deposited check has been paid by the bank it is drawn on are that bank and the issuer of the check, if he or she is honest.
When you deposit checks to your accounts, you remain responsible for those checks if they are returned unpaid, even if your bank has let you withdraw the funds. Sometimes, transportation delays and other problems can delay the check's trip to the paying bank (and back, if it's not paid), and even then, you're responsible if the check bounces. That's the way the law has worked for decades.
It's unfortunate that your wife's business has taken such a blow from the two checks. Unfortunately, your wife has been victimized by one of her clients, and it appears that she has done what she can by filing the police report.
Published on BankingQuestions.com 5/21/09
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