WWYD? Cashier's check is no good

[Gardening Grandma]

Two weeks ago I picked up a cashier's check from Smith Barney for $65,000. (The funds were withdrawn from our investment account).
Yesterday, the check's recipient took the check to the bank where they were told the check was no good.
I spoke to the person at the bank who gave me the telephone number to verify. Called it myself and after inputting the check # and amount got an auto message saying it was no good.

Called our financial guy at SB. He tried, got the same result. He called customer service (it was 4:30 on the west coast, so 7:30 on the east coast) and got no response other than a recording saying there was no answer. He called me back after about 10 minutes and said he was very sorry, that because of the merger of SB and Citi there were problems with the computer systems. Apparently, the # on the check and the # in the system were different.

He asked me to come in on Monday to get a new check. ( Their rules require two signatures on a cashier's check over a certain amount and there was only one person available at 4:30)

DH is so upset with them he's encouraging me to close the account. But even if I do, there'd be the hassle of opening another account. In addition, our IRA's are there. I've been working to consolidate and simplify our accounts.

Another irritation is that in Feb, they imposed a new fee of $150/ yr. No letter telling me. They simply took it out of our account, so I was already irritated with them.

What would you do?

[phil5185]

What would you do?

I would close the accounts - SB & Citi are old full-service brokers who have been failing due to the market pressures of online business (that's why they had to merge). But their service will likely continue to deteriorate as less customers want to pay fees for their 'full -service'. I would move everything to a no-load provider.

[Anne_in_VA]

I'd ask them to waive the fee, and then move my accounts out of there. It's ridiculous that there's only one person there at 4:30 and that they don't have there stuff together enough to have a good check done. I'd be looking for another investment place.

[Gardening Grandma]

I'm in a research mode right now. I don't want to close the accounts before having a plan in place.

I've been pretty satisfied with our asset allocation and when DH retired, I think our financial guy gave us good advice, BUT this "customer service" is really unacceptable...

Right now I'm trying to figure out if I can move the IRA accounts without selling them.......I'd like to keep our current allocation pretty much the same......

Grrrrr I am so irritated with them.

[zibazinski]

I've never heard of such a thing. I'd sure like to know the reason WHY a cashier's check drawn on an American account was not good.

[Gardening Grandma]

Apr 9, 2011 10:42:49 GMT -5 zibazinski said:

I've never heard of such a thing. I'd sure like to know the reason WHY a cashier's check drawn on an American account was not good.

I'd never heard of such a thing either. The stub has my account number, a large 9 digit # in the top right hand corner (presumably the check number) , and a smaller 9 digit # on it. The check itself has only the large 9 digit #. Our financial guy at SB said that the smaller # on the stub was the correct #, but that doesn't appear anywhere on the check itself.

I know that SB is merging with Citi, and (thanks to Google), found some articles about some of their problems merging technologies, but I don't care about that so much as not being able to reach a customer service person at 4:30 pm west coast time. That just stuns me.

I mean, at this point, $65,000 seems to have vanished into thin air!!!

[zibazinski]

SHAME and DOUBLE SHAME. If this caused any embarrassment/hardship, I'd be wanting a major apology in writing.

[busymom]

Scary! I'd be freaking out with a cashier's check that large being "no good", and then the lousy customer service. Maybe look into a smaller firm closer to home.

[zibazinski]

yeah, something is seriously wrong and the customer service leaves a lot to be desired. I am sure someone has broken some major banking laws as well.

[cpadvisor]

you people are freaking drama queens... have you never made a mistake before? this mistake may even be out of the control of your advisor or person you dealt with directly.

I feel sympathy for what happened, but this was not an unethical or intentional harm to you. See what they can do to make it right for you and make sure they apologize. other than that, i think you should relax if they go out of their way to make things right...

maybe thats just what i would do...

[Gardening Grandma]

SHAME and DOUBLE SHAME. If this caused any embarrassment/hardship, I'd be wanting a major apology in writing.

Oh Gawd!!! Did it ever! The reason for the check will be on another thread. Let's just say that right now, the reciepient is just short of accusing me of trying to stiff them. (In addition to the embarrassment THEY experienced at the bank)....I've apologized to them repeatedly and asked them to meet me at SB Monday morning at 9:00 to get a new check...

[Gardening Grandma]

you people are freaking drama queens... have you never made a mistake before? this mistake may even be out of the control of your advisor or person you dealt with directly.

I know it was out of the hands of my advisor. And, yes, I've made plenty of mistakes. But not a $65,000 one. As I've said, the most frustrating part is not being able to reach customer service during working hours.

I'm charged $150 "service fee" for that account - for the priviledge of writing checks. In addition, we are charged 1.38% of our IRA accounts. I do expect some customer service.

[zibazinski]

Holy Cow!!!! You need to get your behind and your accounts to Schwab. Yes, I'd be thinking the same thing if I got stuck with a bogus 65k check. The people you wrote it to don't know your history or your account issues, they just want their money.

[cytoglycerine]

GG - You should definitely be able to switch your investments out to a new account at another brokerage without having to sell them - the industry terminology for that is an "in kind" transfer. Basically means they take your assets (shares, mutual fund units, bonds, cash, etc...sometimes certain guaranteed products like CDs cannot be moved in kind) as they are right now and move them to a new institution of your choice. There may be an administration fee for this (in my experience, it's usually the same cost as moving everything in cash) but it is a very common transaction type, and should be doable by your current brokerage.

[Deleted]

I'm sure intellectually you know the money's not lost but somewhere in limbo. They'll find it but what a PITA!

Yes it's time to change banks. Also a PITA.

I wrote at length about issues we had with BofA the end of 2009. We moved most of our money to USAA but still kept the property accounts because they are linked to some BofA mortgages and I really don't want to be changing things until we move back to the States. Oddly enough the customer service finally started improving a few months ago until I tried paying off one of the mortgages last month. I couldn't transfer $231k from my BofA checking account to pay off my BofA mortgage because I couldn't send a wire from out of the country. However USAA could access my BofA account and wire the money to BofA mortgage.

I contacted a Sr VP of Merrill Lynch to help me out. She couldn't help me either. But she hoped that we would resume our relationship with ML once we returned to the States. Honestly she was trying to be helpful. But it still took a lot of restraint on my part from responding to her e-mail with a one-word response. WHY???

Good luck and make sure you get those fees waived!

[pargie]

I was able to move IRA and regular investment accounts from Merrill Lynch to Vanguard without fees and without having to sell everything -- it all went over as an "in-kind transfer".

[The Walk of the Penguin Mich]

you people are freaking drama queens... have you never made a mistake before? this mistake may even be out of the control of your advisor or person you dealt with directly.

Of course, but when I make a mistake I bend over backwards to rectify it - as do most. It doesn't sound like the OP's investment firm moved too fast - or was too inclined to make things right.

In fact, USAA made a collosal mistake on a deposit I made into my checking account (a decimal place 2 positions off). Within 24 hours, the mistake was rectified, my creditors appeased and I was happy.

[Deleted]

GG, sorry to hear about this and I hope you get it straightened out soon. I just wanted to say that I have an account at Smith Barney and had a check drawn on my account for $50K go through with no probolem so it doesn't always happen. I can also tell you that if that happened in my account my account exec would be all over the back office people to get them to fix it.

[commentator]

Apology? I wouldn't want a stinkin' apology. Lay some cash on me or I'm walking.

Actually, I'd walk anyway which creates an ethical dilemma in my mind. Striving for extra cash, when I know I'm going to them either way, is not something I would do.

[Gardening Grandma]

toughtimes,
I know it's not like an ordinary check. And the money IS out of the account - the account is still open because I did not empty it; there are still funds there. In addition, we have our IRA accounts with SB.

What puzzles me is that when I was talking to the woman at the bank (Wells Fargo) - I told her it was a cashier's check and I tried to assure her that it was good. She said that payment even on a cashier's check could be stopped. I don't know how that could be, but that's what she told me.

I will be at SB Monday morning when they open to see how quickly they resolve the issue - and I will ask them to refund my $150 "service charge". Then I will take some time to decide how to proceed.

[debtheaven]

GG, just a guess here, but are you buying your ex DIL out? If so DOUBLE OUCH that the check would have been refused if it was written to your ex DIL.

I'm sure it will all get straightened out Monday, but I'm sorry you're going through this, I'm sure you are totally stressed out. For sure I would be sorely tempted to leave these people, but you need to cool down once the check goes through and make sure you're not cutting off your nose to spite your face in terms of extra work / time spent.

I can't wait to see your post on Monday that it has all been straightened out!

Something similar happened to me recently. It was not a cashier's check, and it wasn't for 65K for sure. It was a check I was depositing on DS3's account. With that check he went over the limit on his "high interest" savings account. The guy at the desk offered to figure out exactly how much DS3 was allowed to put on the higher savings account, and transfer the rest. I said thanks so much but no, please just put it on the lower-interest account and I will do it from home. (Because that's how much I trust their math skills.)

So the check had to be withdrawn and redeposited on another (lower interest) savings account. I get home (five minutes later) and see the withdrawal from the higher savings account, but not the deposited check. I went ballistic, called their "hotline", got somebody on some platform, told her I didn't want to speak to her, I wanted to speak to the idjut who had supposedly deposited, withdrew, and redeposited the check, except that he hadn't. And I wanted to speak to him YESTERDAY. She refused to put me on till I explained exactly what had happened. I tried, three times, she still didn't get it.

I told her I had already wasted enough time with her, and that it was not my fault her brain cells were not up to par. Plus I speak nearly perfect French except when I am flustered or very upset. I am generally very polite but I admit, I totally lost it. DS3 is 12 and this was money HE earned. She told me I was so rude she'd put me on to the guy only because she didn't want to have to deal with me herself and that I should be ashamed of myself. I told her I'm sure I would be, but only AFTER it all got straightened out.

While talking to her I was sending urgent emails in bright red to my bank manager. By the time the woman on the hotline put me through to the guy at my local credit union he said refresh, it's already been fixed. And it was. But he was very defensive rather than apologetic. He told me "in a worst-case scenario the computers would have caught the error that night." I didn't like that response. But it's just easier to leave it, they have generally been great with us. That's another thing to consider, service over time.

But I can definitely sympathize. I went mental over 365e that disappeared, I can't imagine having to sit it out all weekend for 65K! Above all, I'm sorry this had to happen to you over a weekend!

Another thought: I think you are certainly in a position to demand a manager's personal phone number and email. I do have my bank manager's direct line somewhere (I refused to take out our last rental mortgage with them unless she gave it to me. I couldn't find it, my fault.) See whether they give it to you. I can definitely understand you wanting to change banks, but doing so is SUCH a PITA.

[2kids10horses]

GG,

You've had the check outstanding for 2 weeks? Who has held it at long? You or the receipiant? Does't really matter, but it's a waste to have that much money sitting around in the form of a Cashier's Check.

I'm also perplexed as to what happened at the bank when the holder went to deposit it. Or cash it? As I read your description, it didn't say it was returned, it was just the automated system said it wasn't good. Did they try to deposit it, and it come back NSF? I ask, because if it was just the automated system, the thing MIGHT have cleared if it had been deposited. I don't know.

Anyway, I understand it's been embarrasing. But, YOU shouldn't be, it's not YOUR fault. But, your bank should make this good. What I would do is ask if they could take the check back, and do a wire transfer for immediate credit to the payee on Monday. With no fees, of course. (There's usually a minimal fee for doing wires. They should waive those.)

[Gardening Grandma]

2kids: the check has been sitting at an attorney's office waiting to be picked up. There is a long story here which I will post about on another thread. Last Mon , the recipient went to pick it up; the attorney's secretary had a medical emergency and the attorney could not find the check and associated paperwork, so the recipient agreed to come in on Fri. That's when the provbial sh** hit the fan.

When she went to deposit the check, the bank person called the 800# to verify the check. She gave me the 800# to call. It is Citibank's check verification number. You enter the check # then the amount. The recording said " as of April 8 ,2011 check # xxxxxxxxx in the amount of $65,000 is not available for deposit". Those were the exact words. So the Wells Fargo banker told the recipient they could not accept the check....

Tough times
How could it bounce? It was never even accepted into the system..... This whole thing baffles me.

[2kids10horses]

tough,

I'm not disputing your expertise on the banking system. From my reading of GG's original post, and subsequent posts, I was led to believe that the check had not actually been deposited. To me, it sounded like someone at the payee's bankhad tried to verify the check, and the automated telephone system did not recognise the check. It could be that the automated verification system only verifies Checks drawn on Customer accounts, not on Institution (bank's own) accounts. We just don't have enough informtion here to be accusing anyone of fraud.

If, however, the check was deposited, and it "bounced", that is a different matter altogether. But, I don't think that's what happened. GG will have to verify the sequence of events.

(back in the day, I once had a summer job for the Georgia Department of Banking and Finance. I was a bank examiner for two months!)

[2kids10horses]

Hi GG,

You last post and mail crossed in cyberspace!

So, I was right, the check was never deposited. I thought so. I bet, (just a guess, here) that if Wells had just gone ahead and deposited the check, it would have cleared.

I could be wrong, I have been wrong before! I suspect the automated check verification system is geared up to validate CUSTOMER check, not bank issued checks. Again, it's just a guess on my part.

Still, I'd do what I said before, the recipient should go to the issuing bank and have them wire the money straight into their account.

On a similiar note: I gave a check as payment to the guy who brings round bales to my horses. He works at a credit union. He deposited my check into the credit union. He called me and said he got some strange error and the credit union said that it was unrecognisable. It never even got sent out from the credit union into the Fed clearing system.

My guess (and it's only a guess) is that the MICR machine that the credit union used to enter in the amount of the check screwed up the magnetic numbers on the bottom of the check. He took it to my bank, they looked at it, and said they would cash it, but he kept it. I eventually paid him cash, but you know, these these things occur.

[DVM gone riding]

Zib I love schwab I can ask them questions on sunday, they ans in english and are located in the US!! Glad you like them too! ;D

[Gardening Grandma]

2kids
Yes
That is exactly what happened. Why didn't Wells Fargo deposit the check and hold it til it cleared? I'm sure it would have gone through. But maybe the recipient wanted some of the funds right away. I have not posted anything about her (because it's too long to get into here) but she is a financial train wreck. It IS entirely possible that she asked them to verify the check.....

[2kids10horses]

Tough,

If the payee had taken the check to the issuing bank, and they refused to honor it, then yes, they have stolen the money.

That is not the case here. The payee took the check to HIS bank, and HIS bank tried to verify the check. They called an automated voice response system of the issuing bank. That system, NOT THE FEDERAL RESERVE CLEARING SYSTEM, said they didn't have a record of the check.

We do not know if the check would have cleared if it had been deposited.

Hey, I'm not saying that I'm an expert bank examiner! I did count the cash in the vault, made sure that any one depositor did not have too much in deposits that exceeded some percentage of deposits, that kind of thing. But, I bet I know more about the innerd workings of banks than most people who post on this board.

I'm glad you know how banks make money. Most people don't. In GGs case, she withdrew her money two weeks ago. It was the payee's fault they have not retreived the check from the attorney's office. The bank doesn't owe anyone any interest on this except for the weekend. And even that, is a "maybe". Do Friday deposits get credited for interest on Friday or Sunday? If the bank makes good with a wire on Monday, I wouldn't worry about it. It sounds like Wells could have taken the check and let it run thru the system if they wanted to. They didn't have to make that call to the auto verify system.

For instance, what it the payee had dropped it off at the night deposit. Wouldn't it have just been deposited? I think so.

Yes, they were checking for counterfeit checks, and they think they flagged one. They should have then contacted someone at the issuing bank to see if it were REALLY a counterfeit.

[2kids10horses]

Tough,

Let's make this real simple:

No one disputes the cash was taken from GGs account, and put into the bank's account. No one disputes that the bank then writes a check off the bank's account. This is the Cashier's Check. It is supposed to be as good as cash. (At least they were before the days of really good copiers, and printing machines.)

So, in good faith, GG has directed her bank to take funds from her account, and has asked the bank to write a Cashier's Check, because she wants to give money to someone. GG then takes that check and gives it to an attorney, who is supposed to give it to the recipient. The recepient doesn't come to get it for two weeks. That's her fault. The bank does not owe anyone any interest for that period of time.

Now, on Friday (as I understand it) the recipient get the Cashier's Check (which is supposed to be as good as cash), and trots down to the local Wells Fargo, which is a DIFFERENT bank than the issuing Cashier's check, and tries to deposit it. From what GG has told us, she probably wants to CASH a significant portion of it. Suspecting fraud, or maybe just following bank policy, the teller then tries to verify that the Cashier's check is not a very good forgery. How does she do that? Why, she calls a 1-800 number that is supposed to allow ordinary citizens to verify if a customer has sufficient funds in their checking account to clear. This Cashier's check is not registered in the system, so the recording says it doesn't exist, or won't clear, or whatever.

Again, it may just be a bad voice response system. Maybe they don't put cashiers checks in. Maybe the cashier's check wasn't made out properly so that the number someone would use doesn't show on the check.

But, I will wager a box of KrispyKreme donuts the darn thing would have cleared if it had just been deposited!

Also, if the recipient had gone to the issuing bank with the check instead of a different bank, they could have validated it, and she could have walked out with a stack of cash from the vault.

[2kids10horses]

Tough,

I guess we look at the problem thru different eyes.

I see it as the Cashier's Check is good, and would clear if deposited, that the check verification system had an error or was incomplete.

You see it as the clerk who wrote the Cashier's Check is committing fraud, forgery, or conversion and has stolen the money either for herself or the bank, and the Cashier's check is no good and will never clear.

I guess we will find out on Monday who needs new eyeglasses.