I issued a check to an employee. Knowingly cashing or depositing a check twice on purpose is check fraud and can lead to federal indictments. This occurred in PA. Plaintiff further alleged that CCS and ACCC had assigned the checks to him. I recommend consulting with an attorney, if it goes that far. Gregory E. Maggs * I. In this detail circumstance, I don’t apprehend that Any Peel Checks Cashed, Inc. should be reflected as a Holder in Due Course. ... the employee in this scenario is paid twice … The doctrine says that There is something in the Uniform Commercial Code §3-602 called the "Holder in Due Course doctrine." The holder in due course that is received a check, such as a bank, can claim on payment for the check even if the initial payee and payer are in conflict. According to plaintiff, CCS and ACCC therefore became the holders in due course of the checks they cashed, pursuant to N.J.S.A. The business, unaware of the HIDC laws, then issues a second check to the employee. The employee will then deposit and cash the second check and may take the first to a local currency exchange, where it would be honored and cashed. THE HOLDER IN DUE COURSE DOCTRINE AS A DEFAULT RULE. State penalties for check fraud vary, but depending on the amount of the check in question, check fraud may come with a misdemeanor or felony charge, a fine, and/or jail time. It is conspicuous that ‘Any Kind’ society did not perceive what the disposal following that control was but, they should feel speculated that there was celebrity unfamiliar going on. The payday loan company subsequently sent me a letter stating that they are a Holder in Due Course under UCC 3.302, requesting payment for the amount of the check. I assume what happened is that the OP put a stop payment on the check, the contractor cashed the check at the quick-pay place, the check bounced, and now the quick-pay place is threatening to sue the OP. Plaintiff thus acquired the check cashing companies’ holder in due course status when the checks were assigned to plaintiff. You must have the correct evidence presented by the proper witnesses. The holder in due course rule, which dates back centuries, allows a bona fide purchaser of a negotiable instrument to take the instrument free of claims and defenses. 12A:3-302. If it was posted on a verification service that the check cashing company utilizes, that may be enough to eject them from their holder in due course status. The case of a Kentucky man arrested this month for using mobile banking to steal thousands of dollars from a local supermarket chain highlights … It … INTRODUCTION The “holde r in due course” doctrine, as implemented by Article 3 of the Uniform Commercial Code (U.C.C., or the Code), 1. governs negotiable instruments such as checks and promissory notes. 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