A customer purchased a cashier’s check seven years ago. The named payee has not cashed the check, and we do not even know whether the customer has delivered the check to the payee. Can we contact the customer before remitting the check as unclaimed property? And can the customer place a stop payment order on the check and request that the check be reissued?

Yes, you are required to contact your customer before reporting the cashier’s check as unclaimed property. And no, the customer cannot issue a stop payment order on the cashier’s check if it already has been presented to the payee. However, if the cashier’s check has not been presented to the payee, the customer can surrender the check (or provide a “declaration of loss”) to the bank and have the check reissued.

The Uniform Disposition of Unclaimed Property Act (Act) requires the holder of abandoned property to communicate with the property’s “owner” before reporting it to the state. The Act defines an “owner” to include a “payee” or “any person having a legal or equitable interest in property subject to this Act, or his legal representative.” This definition could apply to either the customer or the payee of the check, depending on which party is the holder of the check. If your customer has not delivered the cashier’s check to the payee, the customer remains the owner of the check. However, if your customer has delivered the check to the payee, then the payee is the owner of the check.

Since you do not know whether the customer has delivered the cashier’s check to the payee (and therefore you are not certain who is the “owner” of the check), we recommend contacting your customer under the assumption that the customer remains the check’s owner. If you contact the payee and it turns out that the payee is not the holder, you risk exposing your customer’s personal financial information to the payee without the customer’s permission.

If your customer responds to your notification, has not presented the check to the payee, and wishes to have the check reissued, the customer should surrender the cashier’s check to your bank, or, if the check cannot be produced, present a declaration of loss statement to the bank. Either course of action will have the effect of a stop payment order. However, if the check already has been presented to the payee, the customer may not issue a stop payment order. As stated in the official comments to the Uniform Commercial Code, “a customer purchasing a cashier’s check or teller’s check has no right to stop payment of such a check . . . .”

For resources related to our guidance, please see:

Uniform Disposition of Unclaimed Property Act, 765 ILCS 1025/2(c) [Repealed effective 1/1/18] (“Any sum payable on checks or on written instruments on which a banking or financial organization or business association is directly liable including . . . drafts, money orders and travelers checks,” is presumed abandoned if the instrument has been outstanding for more than five years, unless the owner has corresponded with your institution in writing or “otherwise indicated an interest as evidenced by a memorandum on file with the banking or financial organization . . . .”)

Uniform Disposition of Unclaimed Property Act, 765 ILCS 1025/11(e) [Repealed effective 1/1/18] (“Before filing the annual report, the holder of property presumed abandoned under this Act shall communicate with the owner at his last known address . . . .”)

Uniform Disposition of Unclaimed Property Act, 765 ILCS 1025/1(f) [Repealed effective 1/1/18] (An “owner” is “. . . a creditor, claimant, or payee in case of other property, or any person having a legal or equitable interest in property subject to this Act, or his legal representative.”)

Gillespie v. Riley Management Corp., 59 Ill.2d 211, 217 (1974) (“. . . the purchaser of a cashier’s check remains the ‘owner’ thereof until such time as he delivers or negotiates it to the payee.”)

Illinois Banking Act, 205 ILCS 5/48.1(b) (“This Section does not prohibit: . . . (7) The furnishing of information under the Uniform Disposition of Unclaimed Property Act.”)

Uniform Commercial Code, 810 ILCS 5/3-312 (This section permits a claimant on a cashier’s check, teller’s check, or certified check to submit a reimbursement claim accompanied by a “declaration of loss,” among other requirements.)

Uniform Commercial Code, 810 ILCS 5/4-403 (“A customer . . . may stop payment of any item drawn on the customer’s account . . . .”)

Uniform Commercial Code, Official Comment 4 to Section 4-403 (“A cashier’s check or teller's check purchased by a customer whose account is debited in payment for the check is not a check drawn on the customer’s account within the meaning of subsection (a) [the section on a customer’s right to stop payment]; hence, a customer purchasing a cashier’s check or teller's check has no right to stop payment of such a check under subsection (a).”)