I recently wrote a check to an individual for supplies to fix my furnace. The person did not bring the supplies, and I cancelled the check. However, the person had already cashed it at a check cashing service, and now the check cashing place is threatening to sue me for the amount of the check and an additional $150. Am I liable for the money? What are the potential consequences to me if I refuse to pay? How should I go about resolving this issue?
While we can't comment on their collection of the additional $150 they say you might be liable for, assuming those would be court costs, they have a valid case. The stop payment on your check was between you and the bank. The check casher is seen as an innocent third party. Unless they knew about your dispute with the supplier, they are a holder in due course and are entitled to certain protections. The check casher accepted the check in good faith and the payment of the check is between them and you.
If you have the time without pressure from the check casher, you should consider trying to resolve the problem with the supplier, which will help resolve payment of the check. The supplier is the only one who has made something for nothing. The supplier should be made to deliver the goods or answer to the law.
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While we can't comment on their collection of the additional $150 they say you might be liable for, assuming those would be court costs, they have a valid case. The stop payment on your check was between you and the bank. The check casher is seen as an innocent third party. Unless they knew about your dispute with the supplier, they are a holder in due course and are entitled to certain protections. The check casher accepted the check in good faith and the payment of the check is between them and you. 