Have you ever had to put a Stop Payment on a check? Did you know that the Stop Payment is only good for a limited amount of time? Verify this with your bank but most banks have a policy on Stop Payments; the standard in the banking industry is 180 days. Then what happens, you ask? You have to keep renewing the Stop Payment on the check every 6 months to avoid having the person cash the check and possibly overdraw your account. Believe it or not, this happened to me recently, thankfully the amount was only $35 and there was money in the account to cover this unforeseen expense but I was shocked and outraged to learn that someone could cash a check TWO YEARS after it was written and the bank honored the check!
In 2014, I put a Stop Payment on a vendor’s check because they said they never received it and I re-issued the check, which they promptly cashed. Fast forward to March 2017, an out-of-sequence check number showed up during my reconciliation of a bank account. I researched the check number and found out that I had put a Stop Payment on it in November 2014. I called my bank and I was told unless there is an active Stop Payment order on file or an “Expiry or Void Period” printed on the checks, it is acceptable for the bank to cash the check. I was flabbergasted! I immediately called the vendor who apologized and refunded the $35. I called the bank back a day or two later and spoke to another representative, I was informed that if “Void after 90 days” or something similar is printed on the check, only then do you have a fighting chance of disputing a check that is cashed/deposited a long time after it was written. I was told it was still up to the bank teller’s discretion and if it is deposited through an ATM, it will be accepted.
I just ordered a new set of checks for one of my company accounts and I had “Void After 90 days” printed on them. However, even this might not be good enough – in researching this topic, I found an IL court case that ruled in favor of the banks. Refer to https://www.americanbanker.com/opinion/void-after-90-days-illinois-court-says-no According to bank sources, the only full-proof way to stop someone from cashing/depositing an old check is to close the bank account!