Understanding Cashier's Checks
Cashier’s checks can be a safe way to receive payments from businesses or individuals—or to make payments to them. These official checks are purchased using money from a personal or business checking account, which is then deposited into the bank’s account. The bank then issues a cashier’s check in its name, which makes these checks lower risk compared to personal checks.
But what happens if you purchase a cashier’s check—or you receive one—and it ends up getting lost? Don’t panic; you do have some remedies when a lost cashier’s check throws a wrench in your financial plans.
How to Handle a Lost Cashier’s Check
If you purchase a cashier’s check and lose it, the first step is to report the loss to your bank. You may have to complete a declaration of loss statement, which basically says you verify that the check is lost and can’t be found. From there, the bank will most likely ask you to purchase an indemnity bond. This ensures that the bank isn’t liable if you lose the check again, or if it’s damaged or stolen.
- Canceling a cashier’s check is more complex than canceling a personal bank check.
- If you lose a cashier’s check you must notify the bank, fill out a declaration of lost form, and wait–it can take 90 days (after you file) to recoup the money.
- The bank will levy a fee of $30 or more when you cancel a cashier’s check.
You can purchase an indemnity bond through an insurance company, but according to the Office of the Comptroller of the Currency (OCC), you may need an insurance broker’s help to do so. And, if you’re successful in buying an indemnity bond, the bank may require you to wait 30 to 90 days before issuing a replacement check. That could be problematic if you need the check for something like paying your rent, buying a home or buying a car and you don’t have other funds to fall back on.
Some banks may limit the amount of a cashier’s check that can be canceled.
But what if you lose a cashier’s check that was made out to you by someone else? In that case, the OCC says your first recourse is simply to ask the person who bought the check to buy another one. However, that may not be realistic for them financially, or they may simply not be willing to comply. If they opt not to purchase a replacement check, you could bring an indemnity bond to the bank that issued the original check and ask them to honor it.
Stopping Payment on a Lost Cashier’s Check
Can you simply stop payment on a lost cashier’s check? Technically, the OCC says you may be able to do that, depending on which bank issued the check. Most banks allow you to initiate a stop payment over the phone or online, but it’s a good idea to call your bank to find out what its policies are for cashier’s checks.
Be aware that the bank may still require you to purchase an indemnity bond if you’re stopping payment on a cashier’s check. Also, keep in mind that you’ll have to pay a fee for stopping payment on a cashier’s check, which may be $30 or more. And, you may have to wait up to 180 days for the bank to refund the money to your account.
The Bottom Line
It's clearly not ideal to lose a cashier’s check, but you do have options for dealing with it. However, if you’re worried about the possibility that you might lose a cashier’s check, whether you're the purchaser or the recipient, the best option may be to look for alternate ways to send or receive money. You might consider using a money transfer company such as Western Union, PayPal, MoneyGram or Xoom, or electronic transfers from your checking account to be sure that your money won't get lost in the shuffle.