Two years ago, Arnie Shatz from Santa Ana wrote a check to pay a $5,700 bill.
“I pay all my bills by check. I’m a dinosaur,” he joked.
The merchant told Shatz it never received the check. So he put a stop payment on the check and sent a new one.
Shatz’s bank told him the stop payment would last for one year. He figured that was good enough.
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“My assumption was that it’s only good for one year because if the check was presented past one year, the bank is going to question it and say, ‘Wait a minute, this is an old check, where’d this come from?’” he said.
But that’s not what happened. Nearly two years after Shatz stopped payment on that check, the merchant, who apparently did receive the check after all, cashed it. And Shatz was ticked off that his bank allowed it.
“So I said, ‘You’re telling me that after a year, the check is negotiable again?’ And she said, ‘Yes.’” he said.
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Shatz was frustrated with his bank, but the I-Team learned it did nothing wrong.
These issues are governed by the Uniform Commercial Code, which doesn’t put a time limit on when checks need to be cashed. The UCC just says that banks aren’t obligated to honor checks that are older than six months.
As for stop payments, the UCC requires banks to honor those, which are requested in writing, for just six months. So Shatz’s bank did him a favor and went beyond that. The UCC says if you want a stop to last longer, you need to renew it.
Shatz said next time he needs to stop a payment, he’ll do it all differently.
“I’d cancel the account and set up a new one. I have to be proactive and do what I know is right to protect myself,” he said.
