Who is responsible when someone tries to cash a check with a stop payment?

We issue employee checks through a payroll company. A mistake was made with one check. We were advised by the payroll company to stop payment on that check and reissue a new one with the correct amount. Employee was made aware but apparently cashed both at a check cashing place! Now the check cash place is threatening to sue us for passing a bad check. I thought a check with a stop payment couldn't be cashed? What can we do?|||You are not liable for the check with the stop payment, if the stop payment was in place before it was cashed.|||Check cashing place needs to file claim against your employee, not you. That's the whole idea behind stop payments. Tell them about the Expedited Funds Availability Act, which banks use to place holds on deposits until a check clears. Check cashing places make money charging customer fees and the stop payment orders are a cost of doing business. It's really too bad for them. They have the option of waiting for a check clears before giving money to their customers.





You didn't commit any fraud whatsoever. They're simply blowing hot air and will lose in court, unless they can prove you intended to defraud them.





"I thought a check with a stop payment couldn't be cashed?"





Yup, check cashing places do NOT cash checks for customers. Customers sign their checks over to the check cashing company AND THEN the check cashing company takes the check to their bank to cash it.|||The employee is totally responsible and must payback|||No your employee is the crook. Tell him/her to get there and return the money or their job is terminated.