A cashier’s check is purchased by you, issued by the bank, and—assuming the check is legitimate—guaranteed not to bounce.
But what if a cashier's check is lost or stolen? In certain circumstances, your financial institution can cancel or issue a stop payment on a cashier's check, though you'll likely have to fill out some paperwork.
Cashier's Check Basics
Cashier's checks are often used for significant transactions and large purchases (such as a down payment on a home) when both buyer and seller need assurance the check will clear. To get a cashier's check, you must have the full amount of the check already available in your account. When you visit the bank, the bank will issue the check using the funds from your account, sometimes charging a small fee. Unless there’s clearly fraud involved (such as a forged endorsement), the bank will honor the check and make the funds available to the payee quickly.
However, that security is exactly what makes it hard to cancel cashier’s checks. If you could simply stop payment on those checks at any time, they wouldn't be as useful as guaranteed payments. Still, there are ways to protect yourself in the event of a lost or stolen check.
Unfortunately, the process takes time, and your bank might not honor your request. Learn what steps to take if you need to cancel a cashier's check.
How to Cancel a Cashier’s Check
If your check is lost or stolen (whether you’re making the payment or you received it as payment) you need to contact the issuing bank immediately.
Report the Lost or Stolen Check
Stopping payment on a cashier's check may be allowed if the check was stolen or fraud has been committed. You'll first need to let the bank know that something unusual is happening with the check so they can flag it for a closer look in case it comes in.
Provide a Declaration of Loss
Next, you'll file a declaration of loss with the bank that issued, or printed, the check. If you received the check as payment, ideally you have a copy of it. If not, you may need to contact your customer to find out which bank issued the check so you can make the call.
You need to provide a written statement made under penalty of perjury that you don’t have the check and you’re not going to find it. When you file a declaration of loss, you make a claim to the funds, but you won’t receive the funds until either 90 days after the check was issued, or 90 days after you file the declaration, whichever is later.
During the 90-day period, the bank might still pay the check to whoever presents it. If the check was stolen, you can assume that the thief needs to forge your signature for endorsement or do something else illegal, so the bank may notice (assuming you’ve alerted them to the fact that the check is missing).
If you simply changed your mind about making a payment—but you already sent the check—there’s nothing you can do to stop a valid payee from depositing or cashing the check and claiming the funds. If there’s been a mistake or dispute, you’ll need to recover the check (or the funds) from the payee another way. That may require legal action or negotiation without involving the bank.
After the 90-day period ends, if the check is still outstanding, the bank will release the funds to whoever has a claim on the money: either the payee or the account owner, depending on the situation. If somebody else tries to deposit the check after that, the bank will return the check without honoring it.
Replacement Cashier's Checks
What if you need the money sooner? Cashier’s checks are typically used for large amounts, and the bank took those funds from your account (or took it in cash) when issuing the check. Unless you’ve got plenty of extra money, you may have a cash flow problem.
You can always ask for a replacement check, but don’t get your hopes up. Again, the bank is on the hook to pay for the first 90 days after issuing the check. Banks face severe consequences if they refuse to pay on a cashier’s check—unless they have a really good reason not to. The bank might simply issue a replacement check if they’re willing to risk having two checks out there, but that’s the exception and not the rule. Your odds are best if the dollar amount is small and you can convince the bank that the original check will never surface.
Sometimes banks reissue cashier’s checks if you sign an indemnity agreement: If the original check is presented and the bank has to pay twice, you’ll have to reimburse the bank. For this to work, the bank needs to believe that you’re good for the money, and that’s a challenge with large checks. You could possibly get a bond issued by an insurance company that covers your liability, but that’s difficult and expensive (and not a realistic option for most people).
Unused Cashier’s Checks
What if you still have the check, but you just don’t need it anymore? For example, if you've decided not to go through with a purchase at the last minute.
You don’t need to file a declaration of loss if you still have the check. Contact your bank and ask what the requirements are to return the funds to your account. Typically, you'll return to the bank with your check and write “Not used for the purpose intended” on it and give it to the teller. Your bank should return the funds to your account once they get the check back.
However, some banks make it hard to cancel a check that you’re not going to use. If your bank refuses to return funds to you, you may need to wait longer or fight harder to get your cash. Ask to speak to management. Then, vote with your feet and open an account somewhere else.
Get Professional Help If Needed
If you're considering canceling a cashier’s check, you're probably in the middle of an important transaction, and there might be a lot of money at stake. You must make sure you know the details of how your specific bank handles these situations. You may also need to meet with a local attorney to evaluate your risk and discuss your rights.
Frequently Asked Questions (FAQs)
What happens if a cashier's check is lost in the mail?
The steps discussed here work for any situation in which the cashier's check was lost—whether it was lost in the mail or fell out of your pocket. If you haven't mailed the check yet, you can help prevent loss by paying for a tracking service that allows you to follow the check every step of the way until it reaches its destination.
Who investigates cashier's check fraud?
When you suspect fraud, you can file a police report. Your bank may ask you to do this when you first contact them.