|
 |
Home >> Checks/Money Orders >> Money Orders
Is a Money Order by Any Other Name A Money Order?
Is a money order issued by USPS or Western Union, etc. the same as a check? Do the same UCC laws apply if it is stolen from the payee?
|
|
 Money orders are considered a form of check. Personal money orders purchased from banks, convenience stores, and other outlets, are usually signed by the purchaser or remitter. They are not signed by the issuer or the issuer's agent. They are the closest to plain checks in that they are usually considered one-time use checking accounts, are subject to all of the UCC rules on checks, including stop payments, and are treated as checks under the deposit availability rules of the Expedited Funds Availability Act (Regulation CC). If a money order is stolen, it will be much like cash if it was not completed prior to being taken, since there would be no purchaser or payee information on it. If stolen after being completed, it would be subject to the same rules as a stolen check.
Bank money orders are issued by some banks. They are signed by the bank or a bank representative, not by the purchaser, and are usually completed by the bank, including payee information, before being given to the purchaser. These money orders fit the UCC and Regulation CC definition of "cashier's check," and are not subject to stop payment. They are subject to next-day availability rules under Regulation CC, if deposited.
Western Union money orders are issued and signed by Western Union or its agents. As such they don't get any special status, but they are only subject to stop payment if the stop is placed by Western Union with the clearing bank. Otherwise, they are subject to UCC rules, but are treated as ordinary checks under deposited funds availability rules.
USPS money orders are considered checks, and are subject to the UCC, although the USPS, as a government agency, has its own rules on certain aspects of money order handling and processing. These money orders are afforded next day availability under deposited check availability rules.
Published on BankingQuestions.com 10/21/08
|
| |
|
Accounts
Article
Q&A
Podcast
Video
Blog
Discussions
PDF
Powerpoint
