What is my liability if I mistakenly thought thatI had the right to cash a check and then a stop payment was placed on it?

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What is my liability if I mistakenly thought thatI had the right to cash a check and then a stop payment was placed on it?

I was involved in an auto accident; the other driver was at fault. The insurance company came to my house, looked at my car, and wrote me a check for the damages. The next day I cashed the check. However, a week later I got another check in the mail from the insurer which I thought was for medical, so I cashed it. Turns out it stopped payment on the second check which I didn’t know until 3 days after cashing it. Now the place where I cashed the check wants to me to pay back the money and the insurance company says it can press charges on me. What can I do and am I at fault in anyway?

Asked on September 28, 2010 under Criminal Law, Kentucky

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

1) If you've been overpaid, even inadvertantly (such as by cashing a check which had been stop-paid), you need to repay the money to whomever it belongs to. IF the insurer in fact stop paid the check, so that they only paid out on the 2nd check, but the check casher paid out on both checks, that would presumably be to the check casher. If the insurer did not stp the check in time and so paid on both, it would be the insurer who overpaid. Whomever did overpay is entitled to the money.

2) Criminal liabilty depends on a criminal mindset. If you accidently cashed a check that you thought was legitimate, that would not seem to lead to or support criminal charges--though if you refuse to repay money, knowing you are not entitled to it, that would be a different story.


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