Doesn't looks as clear cut as the title makes it to be.
The banks that sent and received the money are liable. It doesn’t matter who touched the check before the fraud occurred.
The bank would have a case if they could show the victim endorsed the check and then colluded with the thief to allow it to be intercepted. In that case, the fact that the victim had temporary possession of the check would matter.
Note that, if the courts rule otherwise, things get bad fast. Your bank account number is basically public (you provide it to anyone you write a check to or ACH transfer to). If anyone can use that number to forge and cash a check against any account, and the only threat of recourse is “the account holder recovers the money without the help of the banks”, then the US financial system will collapse.
If so, what does it matter that someone else cashed it? Such transaction is unauthorized, it's a matter between the bank and the thief, and doesn't concern Mr. Handy.
What concerns Mr. Handy is Paychex refusing to honor the check. Presumably they are claiming he authorized transfer of money to a person that neither Paychex or Mr. Handy can identify.
Probably PayChex has a weak claim there :)
Again, I don't fully understand checks -- but my impression is that because a check is (often) addressed to a person, they are actually pretty safe. I'm assuming fraud is always the responsibility of the bank that failed to verify addressed person. Hence, why cashing a 100k check probably isn't easy to do -- stealing to check is probably the easy part. Cashing it without getting caught is the impressive part.
That said: In practice, I'd never want to use a check.
Oh the irony.
Imagine I write a check and send it to a friend, but a thief intercepts it and cashes it.
First, this is fraud, meaning a criminal matter to be referred to the police. Surely the bank has records of exactly who cashed the check, and it would be trivial to file charges against the offender?
Secondly, the bank's inability to correctly authenticate the person cashing the check surely puts the financial responsibility on the bank, not the owner of the account?
What happens with check fraud normally? If someone writes a fake check and successfully withdraws money, isn't the bank liable?
https://boatmanricci.com/who-is-responsible-in-the-case-of-c...
The statement from Mr. Handy indicates an amount of $114,000. That's very significant. However, the NYT mentions only $14,000. That's still a large number but, you know, an order of magnitude smaller. Where's the other $100K?
Also, what about enhanced scrutiny for such a large deposit/withdrawal? Aren't banks supposed to file extra paperwork if you're exceeding $10,000 or something? What happened, did the thieves go to an idiot branch or ATM or something? Can you drop into the CHECKS CASHED store on the corner in the ghetto and have your $14,000 [$114,000] worth of fraud?
Once when I took a girlfriend to see a film, we returned to find the car door slightly ajar. She had left her purse on the floor and it was still there. All good? Weeks later, it turned out that someone fraudulently filled and cashed a check that belonged in her checkbook. They had entered my car, found her checkbook, extracted the last one in the book sequence, and replaced everything without a trace. It's true that you need to safeguard your checks!
In Mr. Handy's case, what type of checks were they? Like an ordinary bank draft? There are cashier's checks and money orders too. You'd think that if this was such an important financial transaction that we'd be working with cashier's checks and certified mail. It also strikes me as so weird that they expected Mr. Handy to essentially be the middleman to receive checks he couldn't cash. They weren't made out to him! Why mail checks to him like he's a third party or mule!
Yes, NYT, this would've been far better accomplished by electronic means. There are a lot of things in your article that don't add up. Are we entirely sure that Mr. Handy is telling the whole truth here? Surely there are more irregularities to be uncovered!
As mentioned in the article, there were two accounts: a 401k and a Roth. The $14k was for one, the rest was the other.
"It also strikes me as so weird that they expected Mr. Handy to essentially be the middleman to receive checks he couldn't cash."
As mentioned in the article, that is standard practice, and has been for a very long time.
"There are a lot of things in your article that don't add up."
You didn't read the article closely enough.
littlexsparkee•8mo ago