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I am thinking of selling my car, and reading the advice here, it seems that going with the buyer to my bank office, getting my bank to validate the buyer cashier's check and then completing the sale at the bank is a safe way to conduct business.

However, someone raised the problem that the cashier's check deposit can be reversed some days later.

Is that possible? Is there any regulations on cashier checks to protect the depositee?

Assuptions:

  • I am in my local bank branch, and I have an account on good standing at that bank.
  • My bank has contacted issuing bank and confirmed the origin of the check.
  • Buyer is present during the whole process.
  • There are plenty of regulations on cashier's checks. The problem is that somebody may give you a piece of paper that looks exactly like a cashier's check but is actually a fake. There are no regulations on those. – Nate Eldredge Oct 17 '16 at 13:51
  • @NateEldredge check the question scope. It assumes I am at my bank branch, and the piece of paper was validated by my bank's notary. I will add that the bank has contacted the issuing bank and confirmed its origin. – Mindwin Oct 17 '16 at 14:07
  • Ok. That last bit, that your bank verified it with the issuing bank is the essential part. It's still not completely foolproof; for instance, suppose that someone made a high-quality copy of the check and gave you the copy, and then they take the original back to the issuing bank and cash it before your copy comes in. Then yours will be charged back to you, and you are out of luck. The only way to really avoid it is to walk into the issuing bank and walk out with cash in your hand. – Nate Eldredge Oct 17 '16 at 17:10
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Based on your assumptions, then no, the deposit cannot be reversed. Your second premise (issuing bank was contacted to confirm the cashier check is valid) is the step that usually does not occur and leads to a reversal. The reason for using cashier's checks is that they cannot bounce (if they are real), and by verifying that the check is truly valid, you should be fine.

  • Can you add relevant sources for USA regulations on cashier's checks? – Mindwin Oct 17 '16 at 15:27
  • I'm not sure what sort of regulations you are looking for? Here are some general guidelines: federalreserve.gov/pubs/regcc/regcc.htm, but I don't think it's necessarily relevant to the question, since you are assuming you already validated the check is legit. – TTT Oct 17 '16 at 16:19
  • ok then. I was unsure of something that came up on another question, I just needed to confirm it. thanks – Mindwin Oct 17 '16 at 17:04

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