Money Orders ARGH!

[brcyclesalvage]

I used to think that once a MO had cleared my account that it was as good as cash. Well today I found out that it isn't. The bank told me that buyer of the MO can cancel it for any reason they want up until 30 days after it has been purchased. What is the sense of taking a MO as a guaranteed form of payment if someone can do this? This one was only for $100 but it could just of easily been for $2500 or more. The bank said the buyer could just go in and cancel it and that I would have no recourse except for legal means. As well they would not contact me except by debiting the money from my account.

Ryan

[deltone]

Yikes Ryan, that's disgusting! I have heard about such things. I've even heard that in many cases, you can even cancel a certified cheque which is unbelievable but true. Makes you wonder eh. Did you find out why the person cancelled it? What are you going to do? I would think this is fraud.

[amberwoodottawa]

Money Orders arent worth crap (per my bank).

My son and partner took 3 US$ money orders into our bank last Friday and was told that they would hold funds on them for 15 days. He was told that there are many stolen money orders therefore they were not going to make those funds available to us (The 3 MO totalled about $1,200).

When he told me I went ballistic and threatened that I would close my personal and business accounts and report them to the Canadian Bankers Association.

My son calmly asked to speak with the manager and every time the manager tried to give my son an excuse or a reason he had a right to hold them, my son calmly challenged him with a common sense response.

Crap like "They could all be from some guy who stole them". My son pointed out that we received them from 3 different people (as reflected on the MOs), 1 a USPS MO from an east coast state, another one a major US bank MO from the west coast and the third from a large internationally known bank in the Netherlands. Energetic crook to travel all across the US and the Netherlands just to get $1,200 worth of musical instruments.

We have been depositing Money Orders, cash and PayPal transfers since February without any problems. As far as I am concerned this was nothing more than a way for my bank to get interest off our money.

And to think that we pay a fee for depositing them and they would have use of the funds for 2 weeks. I wonder if CP has shares in the Toronto Dominion Bank.

Malcolm

[acurael]

There was a time many years ago that I would check out every money order received (USPS has a page on their site to check for stolen serials)

I also used to call other issuers to ensure the MO was still valid.

Years later and many MO's later I no longer bother as I've never had a problem at all (knock on wood!)

Generally a bank's desire to hold funds (business or personal account) will depend on activity in the account - current balance, avg. balance, account trends, etc.

AFAIK, interest still accrues from date of deposit on held funds, but these days interest on USD accounts is virtually zero anyway. 😞

FWIW, I bank with TD too and haven't had a complaint about them in quite a while. If I could only deposit USD MO's at a bank machine I'd never have to stand in line again! 🙂

[kpamber]

I deal with tdcanadatrust as well, in both a Canadian and an American account. I take my mo's to any branch, they don't necessarily know my face...not one problem in 2 years. I am personally very happy with their service.
k

[north-of-55]

My bank holds out of country money orders for 60 days. - Although I have never had a problem thanks goodness.

[souranial]

" If I could only deposit USD MO's at a bank machine I'd never have to stand in line again!"
acurael - I might just know something that might interest you! 😉 This solution may only apply if you convert your USD into a CDN account (ask your bank rep to be sure)
I wondered the same thing last year - how to avoid the lineups to deposit U.S. checks! Since I have been banking at the same TD location for over 15 years, the staff there know me and give me a hint that might be worth trying (first ask your bank rep. if they could do this). All you have to do is use the machine. But how to tell it that it is USD? Well, when the machine asks you for the amount you are depositing, you punch in the amount as if it were a CDN check (so if it were a check for $25 USD you would punch in $25). Though your account will show an incorrect balance (since it does not recognize the check as USD), when the staff go through what you deposited they will notice that is US and deal with it appropriately.
Don't take my word for this but thats what I understood from them. I never tried it but have heard some people do this and even do it for their US accounts! It might be worth asking your rep for the best possible way to get around the tedious wait!

Hope that helps!

BTW - I heard that TD has a service that you can opt for that secures checks and money orders from bouncing against your account. Since I receive a not so significant amount of checks, it is not worthwhile for me but may be for those of you that do not accept Paypal 😉

Best Wishes and Hope that Helps,
Daniel

[deltone]

I deal with a credit union and they don't hold them. They also accept the green postal ones. Credit unions aren't as "anal" as the big banks, I've found.

[brcyclesalvage]

I've never had them hold a MO either in my personal or business account but the fact that they can be cancelled for any reason really bothers me. I've never had a problem before but what is to stop this from happening again. If the MO is stolen or destoryed that is one thing. This guy told them he was unhappy with the product so he wanted his money back...bank told me that was a perfectly good reason to cancel a MO. The worst of it is this guy came to the shop and picked out the part. He didn't have enough money so he told us he would send it via UPS the next day...he sent a MO, I shipped the parts, and then said that he didn't like the quality two weeks after he got them. Realy nut bar. We are usually pretty good with refunds but this guy is just crazy...leaving msgs like "If you know whats good for you then you'd better do the right thing" "Only God knows what you have done". That and calling non stop every 15 to 20 mins. I think I'm going to call his work and tell them he had them shipped UPS collect on thier account.

[amberwoodottawa]

I had been dealing with Canada Trust for over 20 years. I have had personal loans unsecured into the 6 figures & repaid promptly. I have deposits, mutual funds, RRSPs US accounts US $ accts and used their former real estate services to sell 2 of my homes.

Since Toronto Dominion has taken them over, the rules are changing almost daily and I am not pleased with any of the changes.

What was once a very progressive institution is becoming a staid old fart of a bank, an opinion voiced by many of the former Canada Trust employees now operating under the TD banner.

Anyway, as I said, we had never had this request until last Friday with 3 Money Orders and I am not in the least pleased with the position they took even though they reversed it and allowed the MOs to clear immediately.

Malcolm

[amberwoodottawa]

Speaking of Banks changing with respect to Money Orders and other services. When we started this business we were going to open up Merchant VISA, MC and AMEX accounts.

Because 99.5% of our transactions would be online, Visa told us they would require q $10,000 security deposit. MC and Amex did not have the same requirements as Visa accounts for 75% of charge card transactions in North America (per Visa).

Thank goodness for PayPal.

Malcolm

[ospreylinks]

Regarding depositing US M.O.'s in a bank machine as Cdn funds then waiting for the bank staff to find the error and adjust your account? I would be real fearful that it actually happens 100% of the time.... ie one missed, goes into the bank slush as unfound error and you never see the difference....

At the same time, if you did it a number of times, I think you would find someone at your bank calling you saying that you were creating extra work tracking down this error and to stop or they would service charge you for their time. I know over the summer, we had a night deposit go missing for 24 hours. When we contacted the bank, they said they would investigate, but if the error was found to be a problem we created, then we would be charge $60.00 per hour for the time they had to investigate....The banks don't want extra work without being paid for it...

Simple solution.... if you don't like standing in line, many banks outside at the nightdeposit also have a letter deposit (sometimes there is a drop slot inside the bank as well).... why not just use this. Or just mail in your deposit. I do this all of the time.

Jeff

[acurael]

My bank person suggested the same thing too (USD into CAN account) but that was years ago - we've since switched over to USD banking.

I think it was CIBC that started offering the ability to deposit USD into a USD account at a abm - so hopefully the rest of the banks will catch on.

Really shouldn't be that big of deal - it's not like we're wanting to take USD cash out - just deposit USD instruments!

[brcyclesalvage]

Get a business account and drop the US MO's in the night deposit box. Costs nothing to do that and there is no waiting in lines.

Ryan

[muminlaw]

I posed the question about stopping payment of money order and/or certified cheques to a friend with the CIBC. He checked into it, and this is his response:

"I checked with Main Branch and was told that if the
purchaser of the MO or certified cheque had sent the instrument to the
seller, then there is nothing the purchaser can do to cancel it. If the
purchaser still has the instrument, then of course he can cancel it by
redeeming it for the amount he paid (less service charge). This makes sense
if you "follow the money": the purchaser paid cash to his bank for the
instrument; the bank either retains the money (if the instrument is drawn on
them) or credits the other bank on which the instrument is drawn; the
purchaser got value by getting the instrument; the seller deposits or cashes
it at his bank, and they get their money from the bank on which it was drawn
- so everyone is whole. But if the purchaser could cancel (and presumably
get his money back), someone is out money (and you know it isn't going to
be one of the banks!), hence your concern about whether it is the seller -
but he already got his money and again, my bank advised that once deposited
or cashed, it cannot be retrieved. Of course, they qualified this by saying
that there may be other circumstances, such as fraud. When the instrument is
lost in the mail, the purchaser can get his bank to put a "caution" or "stop
payment" on it, so that any receiving bank should not accept it. However, if
it is cashed, the purchaser bears the responsibility. So, I hope that helps
allay your concerns."

That restores my confidence in accepting money orders and shipping as soon as I've deposited!

Glenda

[amberwoodottawa]

Glenda
The exception can be the Caisse Populaires. I am a former banker and had a certified cheque bounce because the purchaser put a stop payment on the cheque.
Our client was debited and came screeming to us unable to understand how a stop payment could be placed on a bank certified cheque.
I called the Caisse Populaire and they simply said it was their policy. Dead End. Anyway we charged it back to the Caisse Populaire (they werent big enough to take on the Royal Bank).
Certified cheques are very seldom used now as they are very easy to fake compared with Bank Drafts and Bank Money Orders.
Malcolm

[muminlaw]

Thanks Malcolm, I didn't know that the Caisse Populaires were a law unto themselves, but it doesn't surprise me! I don't suppose the Caisse took the hit though, so it was probably the buyer of the certified cheque that was SOL (as it should be!).

Glenda

[gloriaguides]

When I'm too busy to wait in line at the bank (and I collect up my US checks and MOs for a couple days to make it worthwhile), I just use the CIBC Instant Teller, amount of Deposit in USD and they ALWAYS credit my account with the exchange. Done it dozens of times over the last 30 months. I've never been charged to accept US MOs or checks and NEVER had a freeze on my account for the amounts. I always just go in and cash them--I use the Money at the PO (yes, I like to know what I'm paying and I have a great little outlet where I am welcomed 2 or 3 times daily when necessary!).