Isn’t a certified check the same thing as a cashier’s check when your shipper requires a COD payment from the consignee? Good question. In a recent decision from a federal court of appeals, carriers should be very careful in accepting "bank certified checks" rather than cashier’s checks for
COD payments, especially when a shipper explicitly requests payment by cashier’s check. Failure to do so could result in liability against an unsuspecting carrier. But are carriers now the insurers for shippers who deal with unscrupulous consignees?
The recent court decision which has caused carriers such anguish ruled that ABF Freight System was liable for $53,180.90, the value of a shipment of women’s shoes, which was paid for by the consignee with a bogus certified check. The shipper, Imports, claimed that the carrier, ABF, breached the "agreement" contained on the bill of lading which required that the delivery be "COD Cashiers Check" and that ABF collect payment from the consignee. Instead of getting a cashier’s check, the ABF driver received a certified check, which proved later to be worthless. Because the certified check was not a cashier’s check, the trial court ordered ABF to pay the shipper, Imports, the full value of the shipment, plus interest.
But wait a minute. Doesn’t the bank guarantee both forms of checks as "good funds"? The answer is generally yes. So why did ABF end up paying for the load? Well, the court found that the consignee had this cashier’s check versus certified check scenario figured out. The bottom line is that it is easier to forge a certified check (by just stamping the words "certified" on the check) than it is to forge a cashier’s check, which would require the forger to replicate all of the features of the bank’s form for cashier’s checks.
So, when the ABF driver picked up a certified check rather than a cashier’s check it cost ABF $53,180.90 plus interest.
What we learn from this case is that we must instruct our drivers to use caution. Cashier’s checks and certified checks may not be equal. If a shipper is concerned enough about the financial condition of a consignee to require a cashier’s check, get a cashier’s check. As for certified checks, you may want to re-think whether to run the risk of accepting this form of payment.
If you don’t you may end up taking it to the bank.
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