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Lucy, Esq.
Lucy, Esq., Lawyer
Category: Consumer Protection Law
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Experience:  Lawyer
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I stopped payment on a check written to a repairman who damaged

Customer Question

I stopped payment on a check written to a repairman who damaged my forklift. We notified the man by leaving a message on his phone that there was a stop payment on the check. We asked him to complete the repair and we would then pay him. He took the check to Amscot and cashed it there. Now Amscot is telling me that by law I have to reimburse them. I believe the stute is(###) ###-####Holder in due course. Do I legally have to pay Amscot and if so how much? Just the amount of the check or any additional penalties they may add on?
Thanks,
Barbara
Submitted: 2 years ago.
Category: Consumer Protection Law
Expert:  Lucy, Esq. replied 2 years ago.
Hi,

My name is ***** ***** I'd be happy to answer your questions today. I'm sorry to hear that this happened.
You unfortunately are required to pay the check cashing facility the amount of the check, because they had no way of knowing about your dispute with the repairman when they cashed the check. They are considered a 100% innocent party in this scenario. This is also because you have the ability to sue the repairman for the cost of repairing your forklift and the check cashing facility does not.
You do have a right to ask to see the check. If it was stamped with a stop payment BEFORE they accepted it (meaning the repairman tried to cash it and failed), then they would be on notice that the check wasn't valid and they lose holder in due course statute.
The statute that they gave you is the general rule on Holders in Due Course. There is a more specific statute that applies to check cashing facilities, which is Section 560.406. That statute refers you to Section 68.065, which discusses the relevant service fees:
$25 if the face value does not exceed $50;
$30 if the face value exceeds $50 but does not exceed $300;
$40 if the face value exceeds $300;
or 5 percent of the face value of the payment instrument, whichever is greater.
That's the only penalty they can charge, and it depends on the amount of the check.
If you have any questions or concerns about what I've written, please reply without rating so I may address them. It's important that you are 100% satisfied with my courtesy and professionalism. Otherwise, please rate my service positively to redirect a portion of the payment you have already made so I am paid for the time I spend answering questions. There is no charge for follow-up questions. Thank you.

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