I wrote a check to a person who did not complete the services for which I paid him. I placed a stop payment on the check with my credit union. However the person was able to cash my check at a check cashing company that is now threatening to sue me for four times the amount of the check! What are my options? Shouldn't they be going after the person for whom they cashed the check?
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Certainly, the check cashing company has the right to pursue reimbursement from the payee of the check, but they also have the right to press you for payment. As an innocent third party, known under the Uniform Commercial Code as a "holder in due course," the check casher can enforce the check against you, even though you've placed the stop payment order.
Offer to pay the check cashing company for the face amount of the check, and ask them to drop further claims against you. That will leave you in the position of trying to collect any money due you from the check payee.
When you issued the check and then stopped payment, you pulled other people -- the check casher -- into the dispute between you and the payee. The Uniform Commercial Code rules are designed to undo that and put the dispute back where it belongs: between you and the person you hired to complete those services. The lesson you might have learned from these events is not to issue a check unless the work you're paying for is done and you're satisfied with it.
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Certainly, the check cashing company has the right to pursue reimbursement from the 