Cashing a check at a Check Cashing Business?

Question

A lady received a settlement check from an insurance company for $4000.00. She went to a check cashing business and cashed the check, since she does not have any kind of a bank account. The insurance company then for some reason placed a stop payment on this check for some reason and re-issued another $4000.00 check to her. This Lady went to another check cashing place and cashed this $4000 again. Now, what is first check cashing business, that insurance place stop payment on first check is going to do? Is the check cashing going to go after the insurance company who issued the check and then place stop payment or will they go after the lady who cashed her check? How do check cashing businesses recover there money? Do they constantly have to file lawsuits against everyone?

Answer 1

Why would someone with a legit check go to the thieves place to cash a check ? No wonder there was a stop payment .
With a legit check , a legit person would open a legit account .
Only crooks and the super stupid people who flunked grade school math go to the check cashing places . They are loan companies that charge 500 % on post dated checks and lord knows what on others .
This lady must be a crook or really dumb and will be in trouble forever , best you find a new friend .

Oh , and recovery ? Since she made off with $4000 (a felony by the way) You do NOT want to be around when their collection agents are looking for her ! Although she may get lucky and the police may have her in custody before the collections boys get to her , but the boys seem to be better at tracing and tracking , after all , it is their $4000 she made off with, not the polices .

Answer 2

The short answer is most of the time they don't. A check cashing business is essentially making very high risk short term loans. It may not seem like much but if you charge someone 2.5% to cash a check, some charge more, and the check clears in two days that's an effective yearly rate of over 8000%. They can afford some losses. In the case you mentioned I believe if the lady recieved her cash from the check cashing place and then the check was denied she owes the check cashing place, especially if she also cashed the second check. The person presenting the check is ultimately responsable for the checks value. She would have a case against the insurance company for any fees she had to pay for the returned check but she owes the check cashing place for the money they didn't receive. They will go to court and they will get a judgement. and if someone decides that she knew the check was going to have a stop payment on it she could go to jail.

Answer 3

I think that the company would file against the woman if this situation happened, but more likely the check cashing company would never have given this woman the money until the check was fully guaranteed.
If you get a large check, it is possible to go to a bank and get it "smashed" into a cashier's check, which means the funds are guaranteed by the bank. After a cashier's check is issued, the bank would go after the insurance company for it's money.
Hope this helps!!

Answer 4

Once a stop-payment has been issued against a check, the check is considered as null and void; no value. Only the person named on the check can requests for a replacement check. The check cashing companies can only file claim against the one who "sold" them the cheque and not the insurance company.