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Cheque cashing error

(8 Posts)
littlemissnormal Mon 12-Nov-12 12:28:42

I am running a small local event with a friend and she accidentally sent a cheque to refund somebody thinking that they had paid us when they actually hadn't.

On realising her mistake, we emailed the other party to say what we had done and we hoped that her honesty would prevent her from cashing the cheque and could she please return or destroy it.

We have now discovered today that she has in fact cashed it, while being fully aware of the mistake and that it was not her money.

Do we have any legal rights regarding getting the money back, or is what she's done just immoral? It's only £20 but I think it's dishonest of her!

LadyMaryChristmas Mon 12-Nov-12 12:32:01

IIRC, it's illegal to do this (a criminal matter, fraud I think). You should have stopped the cheque though.

Durab Mon 12-Nov-12 12:36:53

She is entitled to money paid by mistake only if she has spent it in good faith. Therefore, to keep it she has to show that it is already spent and that she believed at the time that the money was hers. This is clearly not the case here, as you told her it was an error before she cashed the cheque.

However, for £20, I have no idea how you would go about getting it back. Sorry.

littlemissnormal Mon 12-Nov-12 13:08:25

Thank you!

Yes, we wish it had been cancelled immediately but naively we thought that as small local companies, integrity would stop this from happening. Lesson learnt!

LadyMaryChristmas Mon 12-Nov-12 13:20:26

You may wish to go down the small claims route. You can add the cost of this onto the £20.

LadyKooKoo Mon 12-Nov-12 13:29:48

Contact your bank and say you want to cancel it. They can recall the money (there may be a small fee but I would do it out of principal!)

Durab Mon 12-Nov-12 13:32:56

Sorry LadyKooKoo, but I don't think they can. Once a cheque is paid it's paid, that's the point. Imagine being paid (in good faith) and then being told a couple of weeks later (after the cheque had cleared) that the cheque had been stopped.

Rockchick1984 Tue 13-Nov-12 14:04:39

Ladykookoo you used to be able to do this, the cheque clearing system changed a few years ago so now once the funds have cleared (6 days after paying the cheque in) the money is guaranteed cleared.

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