As part of the ongoing saga of the bastardy client, I’ve spent way too long composing a letter asking … well, demanding payment by a certain date.
However, I’m also considering an extra precaution since I trust this client roughly the way I trust the Three Card Monte dealers that used to be rife in the subway. This client always used to pay me via credit card, but I’m extra wary that she’ll do a chargeback and I’ll be screwed.
So I’m wondering: is it okay legally – or, if that isn’t kosher to ask, then change the question to is it a wise precaution – to request this person pay me via a cashier’s check drawn on a U.S. bank? (The U.S. would be specified 'cause this client’s paid me via her business checking account based in Canada, and the damn thing took six weeks to process.)
Is there any way once that check has cleared for the client to screw me over? There isn’t is there? I mean presumably the only way to get a cashier’s check is by giving cash to the bank or having it removed from one’s bank account directly, so there aren’t any “backsies” are there?
By the way, I know it’s a pain in the ass for the client, but I don’t care. This is NOT a client I ever plan on working with again.
What happens if you draw a cashier’s check for something, and then the deal falls through and you never give it to the person it was made out to? Can you cash it back to yourself to get the money back?
If we are extra wary of a client, we won’t even take cash-- we insist on a cashier’s check. That way they have proof, we have proof, the bank has proof, everybody has proof.
Yes, you can. I did it last year when I accidentally got a cashier’s check for the wrong amount for my first month/last month/deposit for a lease. It’s not a hassle.
Thanks for the info, guys. Someone originally recommended a certified check, but it’s my understanding that a cashier’s check is the smarter way to go.
Then again, there’s also a money order. But that feels shadier to me than a cashier’s check, which I’m sure has no bearing on reality. Of the three, which would you recommend if I want to be absolutely certain this vindictive client doesn’t screw me at any point in the transaction?
A money order from a bank is the same as a cashier’s check, more or less. The cashier’s check has the recipient’s name on it, and it costs more (at least at my bank).
Both cashier’s check’s and money orders can be forged/faked. To be absolutely certain they’re good, have the issuing bank cash them for you. They CAN be pulled from your account if they’re not good.
It works both ways: my American ex-wife would often receive birthday and Christmas cheques from her mother in the US, and they would take six weeks to clear here in Canada.
I’m assuming, based on what you wrote in the above paragraph, that your debtor is in Canada. Be aware that US banks do not exist in Canada, in terms of business or consumer banking; and so, demanding your debtor provide a cashier’s cheque drawn on a US bank might result in no payment at all owing to the debtor’s inability to open an account at a US bank, deposit funds, and write a cheque against those funds. Well, I suppose the debtor would be able, if he or she made a trip to the US, and visited a bank, and provided it with contact information, and an SSN (which no Canadian has anyway), etc. etc. etc. But if you demanded that, I’d guess payment would never be forthcoming.
However, Canadian banks can issue money orders, payable in US currency (it’s how many of us Canadians bought stuff by mail order from the US prior to the Internet). These money orders are good, and can be cashed at any US bank. That would seem to me to be the best solution. Because the money order has been purchased, a Canadian bank issuing a US dollar money order has the funds to cover it, and will not hesitate to honour it when it is presented for payment by a US bank.
The fact that the cashier’s check would cost my (ex)client more only makes it more enticing. Also, at least as far as I know, many places that offer money orders (at least in my experience with banks or check cashing places) put limits on how much they can be made out to. (Wow, that’s a horribly written sentence. Sorry.) I mean, at my bank I can only get a money order for $700, so if my ex-client’s bank is similar, she’d need about four money orders.
Also, Spoons, thanks so much for the info! Yeah, for two countries that are so close and relatively chummy, it’s amazing how much agita we have to go through just to send mail or money to one another.
I should’ve mentioned this earlier, but while her company is incorporated in Canada, my ex-client lives here in the U.S. and works out of her home. (I’ve always been rather curious about the purpose of that, but of course it’s totally none of my business.) I’m relatively sure she has a U.S. bank account, and if not, she certainly has access to one.
Perhaps it would be smarter to give her a choice of either money order or cashier’s check? I guess the reason I do prefer a Cashier’s check is that it’ll have my name on it, which makes it a little safer. But if either one would work for my purposes, then I might as well offer her the option.
Is there a law that allows you to dictate the method of payment? I think that unless you have an agreement stating that payment is to be made in a very specific form such as a cashier’s check only, that the client can pay you in the normal manner.
Note: If you ask for a US Post Office Money Order and it winds up being forged/etc, they have then committed a federal crime. Also, USPS Money Orders can only be bought with cash, debit cards, or traveler’s checks.
In PA at least, a business owner can stipulate payment accepted. Five years ago I got sick of chasing deadbeat NSF check writers, so I quit accepting that form of payment.
There were people so pissed off about the change that they complained to some office at the county level. I discovered that my action was entirely legal so long as I treated clients equally (not basing my actions on any protected status).
When I bought my car five years ago, the dealer specified that a cashier’s cheque was required. No problem; the bank was happy to provide it. When I lent my son 10K in US money, the bank also issued a cashier's for that amount in US.
I don’t know why this ever even comes up as a topic of discussion, I can name probably 10 major companies that bill me on a monthly basis that accept only certain types of payments. I don’t know where this concept came about in the public consciousness that business owners had some sort of requirement to accept specific types of payments.
Although in the OP’s case they are trying to get payment for relatively long ago completed work that the client has so far not paid for due to their business relationship ending on acrimonious terms. In that scenario putting anything in between getting paid may not be the wisest course.
From reading the original thread it looks like the OP has some files the client wants, which is the OP’s only real leverage at all (and the threat of a DMCA takedown.) I see no reason you could not just accept a normal check and wait until it is cleared to send the files.
Credit card is a bit more iffy, you can actually be hit with a charge back on a credit card many months after the charge is processed. Additionally, the credit card company has to expend resources investigating chargebacks at all so they do not like merchants who have chargebacks done against them. For this reason you’ll often have to pay a $100+ fee to the credit card company as a “fine” for the chargeback (whether they agree to actually execute the chargeback or not, the penalty is for the chargeback request and investigation.)
Also, at least as far as I know, many places that offer money orders (at least in my experience with banks or check cashing places) put limits on how much they can be made out to. (Wow, that’s a horribly written sentence. Sorry.) I mean, at my bank I can only get a money order for $700, so if my ex-client’s bank is similar, she’d need about four money orders.