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My Bank Cashed a Stopped Check
I recently stopped payment on a check written to an employee because he thought it was stolen from his truck. I then went to my bank and stopped payment on the check. Later on the employee found the check, went back to my bank, and without my permission the bank lifted the stop payment and cashed the check! I didn't find this out until almost two months later when I received my bank statement, and to my surprise the check had been cashed, without my permission to lift the stop payment order. What are the bank regulations on lifting a stop payment? I am very concerned, in that this could happen again! This bank is in Florida.
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 Wondering if the Florida Uniform Commercial Code (UCC) might hold language that is in no other state's version of the UCC, we looked it up and found that the section on stop payments (section 4-403) doesn't have any surprises in it. Because you said that you went to the bank to stop payment, we assume you signed a written stop payment order. That would be effective for six months unless you lifted it, and nothing in your description of the situation that would have permitted the bank to lift the stop on its own initiative, and most certainly not on the request of the payee.
You said that you found out when reviewing your bank statement that your employee had cashed the check. Do you know for a fact that your employee cashed it, or is that what you assumed, seeing the check in the statement? Did you replace the check for the employee when you placed the stop payment order?
It's entirely possible that the bank didn't lift the stop order, but simply missed it when cashing the check. However it happened, if you are now out the amount of the check because you replaced the employee's check or because the employee didn't actually cash this check and is still due his pay, the bank is likely liable to you for the amount of your loss. Go to the bank and ask how the check was paid over the stop payment order, and provide the bank with a written statement of how much you lost as a result of their error, asking for reimbursement.
Published on BankingQuestions.com 1/10/07
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