Using Banks and Bank Accounts/Cashing a torn check

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Question
Dear George,

We are a 501(c)3 dog rescue located in Round Lake Beach, Illinois.  We did a fundraiser with coffee cakes before Christmas and determined after writing a check to the provider of the cakes, that she had overcharged us for the fundraiser.  We called her and she agreed to rip up the check in the amount of $572.85 and we would pay her the $443.00 she was owed.  

Granted, we were late in providing payment to her, but sent her a PayPal payment to cover the amount.  In checking our bank account balances, we learned the provider had put the check through, and in e-mail has admitted that she taped the torn check together and cashed it.  We, of course, cancelled the PayPal payment.

We have no problem in paying her what she really is owed, but she now holds $129.85 of our money and has been less than ethical in her dealings.  Do we have any recourse?  Isn't a torn check ripped in four separate pieces considered a voided check?  Should our credit union have cashed this check?

Many thanks,

Darlene Agena-Hombaker
Executive Director
True Hearts of Rottweiler Rescue

Answer
Hi Darlene,

Unfortunately there isn't a straight answer I can give you regarding the ripped check policy.

Depends on the relationship the person has w/ the bank that they made their deposit in, and in general even how nice the teller is at the station.

Usually banks will not take a check if it is altered with but when ripped up and taped together one can say It was ripped by opening an envelope.

Next time I would advise you to put in a stop pmt on the check just to not take a risk.

Using Banks and Bank Accounts

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George

Expertise

Anything pertaining to Commercial or Retail Banking. Including, Interest rates, Lending, as well as Prime Rate questions. Also can help with online banking questions including all regulations.

Experience

Retail and Commercial banking since 2002. Currently employed as an Assistant Vice President at a Commercial Bank.

Organizations
Chamber Of Commerce, National Notary Association

Education/Credentials
Extensive credit knowledge.

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