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I live in California and TD Ameritrade (where I have an account)

Resolved Question:

I live in California and TD Ameritrade (where I have an account) issued me a check in the amount of $1800. I cashed the check at California Check Cashing Stores, and TD Ameritrade stopped payment on the check. Now California Check Cashing is threatening to file a police report if the full amount is not paid in two weeks. The check was written a month ago, and I had no idea the check hadn't cleared. I tried calling TD Ameritrade and they said it was highly unusual that a "stop payment" had been issued, and that the funds were in the account when they issued me the check. I told California Check Cashing I would pay them back in payments, and they will not accept payments on this "stop payment" check from TD Ameritrade. What is my remedy? Given TD Ameritrade made the decision to stop payment - are they liable? Should I be concerned that California Check Cashing has threatened to file a police report? Mike
Submitted: 1 year ago.
Category: Legal
Expert:  Jack R. replied 1 year ago.

Thank you for choosing Just Answer.

 

First of all the cashing of the check would not be a criminal matter because the intent to defraud or otherwise cheat California Check Cashing was not there. Get the $1800.00 from TD, the money must still be there to pay CCC, if a stop payment was made. If the check cashing has added some fees these should be paid by TD . You just need to get a statement showing the fees from Check cashing and show to TD Ameritrade.

 

You should get a letter from Ameritrade indicating the stop payment was incorrectly processed and that there were adequate funds in the account when the check was issued. Keep a copy, take a copy to California Check Cashing. if a police report is made, show them the letter make sure you keep a copy if they ask for it.

 

TD Ameritrade is only liable for the excess fees. You are liable to repay the $1800.00 because you received $1800.00 . The original $1800 should still be in your account if the check bounced..

 

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Customer: replied 1 year ago.


Thanks Jack! This happened about a month ago, and I've already spent the money. I only found out about the stop payment recently, and spoke with a representative from TD Ameritrade yesterday who told me that it was highly unusual that they stopped payment on the check that was issued to me. It seems the funds were there to cover the check - and then given other items came through - they weren't there - so I'm guessing that's why they stopped payment. TD Ameritrade is online only, the check that was issued to me was out of state, and TD Ameritrade doesn't send statements out, and couldn't give me more information as to why. The botXXXXX XXXXXne is -- I know I'm resposible to repay California Check Cashing - however, given the circumstances, and it being so long ago, I want to make a payment arrangement with California Check Cashing, but they tell me they don't accept payment arrangements, and if I don't pay them back by April 19th - they will file a police report. Do I have any remedy? Should I be concerned once the police report is filed that I could be arrested or have to appear in court on this? I can only afford a payment arrangement to pay these funds back - and yet California Check Cashing will not allow me to do so - and wants the amount in full by April 19th. What can the police do? What remedy do I have? Mike

Customer: replied 1 year ago.
Relist: Incomplete answer.
Expert:  socrateaser replied 1 year ago.

Hello,

Different contributor here. Please permit me to assist.

First, California has two different bad check laws. A civil law, and a criminal law. The civil law provides penalties for failure to satisfy the insufficient funds check in a timely manner. The law is very complex. See this link for a detailed explanation.

However, you don't really need a detailed explanation. The botXXXXX XXXXXne is that if you don't pay the check, then your penalties will start to mount up and you will get stuck in the mud with a huge debt. So, you need to get the money from TD Ameritrade, and pay the check cashing service so you can get rid of that part of the problem.

Concerning the service reporting you to the police, Penal Code 476a provides that it may be prosecuted as a felony to pass a check in an amount of $450 or more. However, to prevail, the district attorney must prove that you intended to pass the check with insufficient funds, and since you presumably could prove that it was a problem of the investment institution, then that would avoid the criminal conviction.

But, it won't stop the police from arresting you and charging you with the crime, and that means you will have to go through the criminal justice system which would cost a lot of unnecessary time and money.

So, once again, you need to get the money and pay the check cashing service.

Once you have done that, you can demand that TD Ameritrade pay all of your penalty fees that you had to pay the check cashing service.

If they refuse, then you will have to demand arbitration (because TD Ameritrade customer agreements have an arbitration clause, so you cannot sue in court). If you can show that the account had sufficient funds, and the check was stopped due to an error by TD Ameritrade, then the arbitrator will order TD Ameritrade to pay you -- and to pay your arbitration costs. Hopefully, that would be the end of the matter.

Alternatively, you can file a complaint with FINRA. If the error is as cut and dried as you describe, FINRA can force TD Ameritrade to pay you, or risk losing its brokerage license (which would be ridiculous, given the small amount of money at stake).

Those are the options.

Hope this helps.

Customer: replied 1 year ago.


Thanks Socrateaser! Let me just ask three more questions to get complete with this:

 

1) Just to recap - the check in question cashed by me at California Check Cashing was NOTa personal check I wrote from my checkbook - RATHER a check issued to me FROM TD Ameritrade. So the check was drafted "pay to the order of me" -- and it was from TD Ameritrade. (Not sure if that makes a difference or not). I think that's called a third party check. It would be along the same lines as if I had cashed a payroll check - and then my employer stopped payment. Or something like that. While it is true that the check was paid to me and drafted to me by my instruction to the bank, and my account at the time did have funds in it. I just want to make sure you know that the check was not a personal check - rather a check from TD Ameritrade made out to me.

 

2) The check was drawn out of state - TD Ameritrade's checks are out of state checks. I read somewhere that affects the way it can be collected or not collected and makes a difference according to California law I think?

 

3) Even though California Check Cashing has given me an ultimatum of paying the check no later than April 19th or they will go to the police and file a police report - don't I have any remedy to ask to pay by April 30th instead? Mike

Expert:  socrateaser replied 1 year ago.
I understand that the check is third party. As a consequence you could use the same remedy against TD Ameritrade as the check cashing service intends to use against you.

But, it's largely irrelevant, because collecting from a large organization is hell, and you won't want to spend the time or money to do it. Which is why FINRA is a better way to proceed.

Re reporting you to the police, I don't think that there is a criminal complaint available. But, you don't want to risk being arrested, just because you ultimately have the legal high ground. You can sit in jail for 48 hours without any charges against you, so unless you feel like enduring the risk. you're better off just paying the check, and then going after TD Ameritrade for the additional fees by lodging a FINRA complaint.

You can delay as long as you wish. Just realize that you're risking a criminal citation and/or arrests by doing so. That's your choice to make.

Hope this helps.
socrateaser, Lawyer
Category: Legal
Satisfied Customers: 34145
Experience: Retired (mostly)
socrateaser and 22 other Legal Specialists are ready to help you
Customer: replied 1 year ago.

Thank you SO VERY much! I will do my best to negotiate a later payment date, and either way -- I will pay the debt by the due date to avoid the possible consequences you listed above. Many thanks again!



Mike

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