If someone steals my check and cashes it, who takes the loss?

I would think that if you can prove the theft, and if you can enlist the client’s bank (via a request from the client, because it’s in the interests of all parties to resolve the issue) to validate the criminal conversion, then the badly acting bank should make you whole.

This supposes that someone outside of your circle of business associates and/or family who had legal access to the mail and to the check, and who may have had authority to act on it: to cash or deposit it on your behalf, performed a criminal act. (If it’s one of your associates embezzling from you, then that would be a different story, I think, unless a bank official was in on a conspiracy.)

Banks are required to know check endorsers and to exercise reasonable care in cashing and honoring checks – particularly when the people presenting them are NOT the people named as recipients. If a bank honored a check made out “to you” for someone else, then they acted badly, it would seem, and need to overhaul their processes, at the very least.

The checks my mother-in-law sent out last month for bills were taken from her mailbox, copied, and then rewritten for different amounts and purposes.

She went into her bank and gave them all the information she had, they refunded the money and appear to be pursuing the people who used the checks. She still owed the money to the people she originally wrote the checks to, but they were pretty understanding since she had a police report on hand.

I would assume your client could do the same, and they would technically still owe you money as it was never received. Just like if they put it under your doormat but you never got it. It may technically be on you to prove you weren’t the one that cashed the check, but that should be pretty straightforward.

The party who lost money is the bank who cashed the check.

Yes, it’s the responsibility of the bank to only pay checks to the intended recipient. As long as the person writing the check didn’t do something incompetent, it’s up to the bank and they or their insurance company would be out the money (unless the thieves are actually caught and the money recovered and restored to the bank).

Your bank should reimburse the funds if you file a fraud/theft case. They insure for this kind of thing (just like how no customer loses a single dime when a bank gets robbed). If this is something that actually happened, and not just idle wondering, the first thing to do would be to call your bank, inform them of the theft and they should tell you what steps to take next.

Thanks for all comments.

@Darth_Algar, wondering, but not idle. There have been numerous mail thefts and package thefts in our area in the past couple of years. My outgoing checks were stolen from our mailbox, and we didn’t know until a police detective phoned to ask if X had any legitimate reason to be in possession of my checks. The police kept the evidence. I had to write new checks to pay my bills, and I got charged overdue fees.

(The culprits were sentenced to six years in prison.)

I don’t leave outgoing mail in my mailbox any more. I take it to a mailbox or post office or put it into the hands of the letter carrier.

An incoming check to my husband was apparently stolen recently, and someone who knew us indirectly got hold of it. It was on its way to some kind of broker before it was intercepted. We were lucky to recover that one.

Right now I have an overdue incoming check from a client, and if they say they sent it, I want to be ready to act if a reasonable time elapses and it hasn’t shown up.

@Jeruba Did whoever charged you a late fee for a stolen check ever relent on the late fee?

I had an incoming check that the issuer said they had mailed me but after about a month had elapsed, the check never showed up. They had me send them a notarized affidavit saying that I never received the check and never cashed it. They then voided the old check and promptly re-issued me a new one. End of problem. No one knows where the old check went.

@Zaku, no on two. On one, I didn’t even bother to ask because I would have been left hanging for ages on a customer service line. On another, I talked to them on the phone and they pretty much shrugged: “Tough luck.” They had my stuff—it was for a storage unit rental—so I didn’t mess with them. I paid the $10.

The professionals on the list, the lawyers, of course the ones with the biggest bill, didn’t charge us extra.

I forget who the fourth one was.