May 24, 2011

Money Mart -scam and educating the public on shadey practices

So we are a pretty little flower shop that spreads warmth and cheer to others, right?!  Well this last few weeks I am also getting an education on shady business practices and an over 100 year old law that protects the unethical.

Over Mother's day we hired a few contract driver to help out over our rush.  This is something we have done at the store for the past ten years and never had any issues.  This year is the first year we got bit.  We have always paid our drivers by the delivery and in this case as soon as the check was signed we started getting calls about flowers not being delivered.  I proceeded to call the driver and he never returned my calls; not on Sunday, not Monday AM, nor Monday PM, and not on Wed.  His errors and blatant disregard for deliveries cost the store over $500.00 in replacement value as well as having disappointed our customers with some deliveries that did not get received for Mother's Day.

I phoned my bank on  the Wednesday following Mother's day and his check had not yet cleared the bank and was advised that I could stop payment on the cheque.  With him costing the business more that the amount that was owing to him I was hoping that this would at least have him contact us to get some questions about what happened with these deliveries.  Well on the same day the cheque was stopped this drives took the cheque to Money Mart and received his cash.  Money Mart has since contacted us saying we are responsible to pay them the amount of the original cheque plus a $40.00 fee for the NSF fees.

I was sure that we would not have to pay them but have since found out that if Money Mart sues you...that you will loose the fight and end up paying not only for your time, legal fees and the original cheque; regardless of how right you where to stop payment on the cheque.

The Bills of Exchange Act, which is more than a century old states that " A section of the Bills of Exchange Act. It defines “a holder in due course” as someone who wasn’t told about a defect in a “bill” or cheque when they got it, and says payment can be enforced “against all parties” by such a holder.

In other words, as several Money Mart personnel I talked to made a point of emphasizing (in near-identical language), a stop-payment order “has no legal force.”  In my research online, case after case people loose when up against Money Mart.  It seems crazy to me that a stop payment effort has zero protection to you if a cheque is cashed at one of these check cashing institutes.  Many of the stories on line are even more crazy that mine and the business owners in the end where still liable.

I guess in some ways I am just venting and in another way I just want to get the word out to other people so they do not have to put up with the frustration I have had with this situation.  It seems to me that this Bill needs to be amended to protect people from fraudulent cheques being cashed.  If this driver had tried to cash this cheque at any bank or credit union it would have been held for up to 5 days and the driver would never received his cash (unless he came to me to reconcile the delivery issues in which he was paid for), but because he went to a check cashing institute they can actually hold me accountable for that cheque, even though it was never written to them.

So a couple of questions:  Why bother with a stop payment on a cheque if it can not protect you?  Why do bank not inform you that a stop payment can not protect you if the person you write the check to chooses to cash it at a cash checking institute such as Money Mart?  Why are businesses like Money Mart not doing due diligence to insure that they are only cashing valid cheques? and lastly what can you do to protect ourself when writing a check to someone you do not do business with often?

It has been a very frustrating process.  The one little piece of information I have is that when writing cheques to people you do not do regular business with make a notice saying they are only negotiable at a chartered bank, trust company or credit union in the memo bar and keep a photocopy of this cheque for your records.  There are many other articles on line that share further information and other ideas to protect yourself but the big thing that is missing for most of us is that we were never given any of this information...so count me in on a mini mission to get the word out and hope I save a few people from this mayhem. 

I will share a few other links of other peoples stores, some far worse than mine, that you would think the person writing the check would never be helt responsible.  One case a business owner stopped payment on a check after an employee came and told him that they had lost their pay check; he stopped payment and reissued the check.  The employee cashed the second check, found the original check and took it to Money Mart and got a second payment.  Money Mart sued the business owner for the second check and he actually lost the suet!!  Unbelievable and seems so unjust!  Something need to be done about this Bill to protect justice and to stop these company like Money Mart from making money off of good honest people... right now they have a win, win situation on their hands.  When you take your check to them they cash it keeping a percentage of the original amount as there "fee for service" and they know good and well that if the check bounces for any reason they can pull the Bill of Exchange Acts at you and force you to pay the full amount.  They are thieves in my opinion and need to be shutdown!!  They have been given the green light to being criminals!!  Please get the word out and help protect yourself and others.

More info to read:  http://www.canada.com/vancouversun/news/business/story.html?id=908b189c-f3cf-49ea-959a-6434008a196a&k=25276,

http://www.canada.com/vancouversun/news/business/story.html?id=fee8ff50-cd4d-4dc0-9716-15b8940e67b2

http://www.google.ca/url?sa=t&source=web&cd=9&ved=0CFAQFjAI&url=http%3A%2F%2Fwww.cbc.ca%2Fnews%2Fstory%2F2009%2F06%2F12%2Ff-marketplace-cheques.html&ei=dnfcTbSHJZDciALAoc0J&usg=AFQjCNFZRHysD9I4iDjOOP2b6IxT9yTpZQ


Let me know if you have any simular stories or any further information to share.  Now it is time to go and take a deep breath!!  Deep Cleansing Breath!!  Thank God for flowers!!



8 comments:

  1. Can you take this shady horrible creature to small claims court to prove your point? Yes it will cost time and initial layout of a few hundred dollars but just to stand up and say NO this is wrong. And maybe more businesses will do the same as well.

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  2. The driver has skipped town and no one has any information on his whereabouts. A true man of character!! NOT!

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  3. You should get some advise on this. As a former Branch Manager for BMO for 17 years, I can tell you what we were told by our O and M Dept. "Holder in due Course" is only relevant if on an ongoing trend of the drivers business is that that he cashed cheques of yours at another financial institution, (including Money Mart) on a regular on-going basis. if this is a First Time, one time deal, tell Money Mart to pound sand. As well, visit the Police and get the driver charged with theft. You can represent yourself for free in court. The very worst thing that you could have happen is lose, and have to pay the amount. It is small claims value and it will certainly make you feel better.

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  4. Sorry 2 read about ur misfortune, Ellie! Obviously, I know nothing about the laws in Canada, so don't have any practical advice for you, but the previous commenter made whout sounds like a few sensible suggestions to me.
    I personally, have never had a chequebook and I'm not going 2 get one now. I make all payments via either c/c or electronic money transfer. And even though after an EFT the money is gone, at least you have the account details of the recipient and there's a data trail - altho, whether the police will bother 2 follow up in such a case is another issue...
    Over here in Oz u can note a cheque as "non-negotiable", ie. the person cashing it in has to identify themselves and maybe even limits it to being deposited into a bank account and does not allow for cash 2 b paid out... but as I said, I'm not using them, so not sure about that one...
    Lastly, think about a follow-up-system to check with ur clients whether everything was ok b4 paying the driver(s) - maybe a courtesy email sent out from u late Sunday arvo or a courtesy call Monday morning, while deferring driver payment until Monday arvo or Tuesday morning??
    It really sucks when u work hard on such a special wknd only 2 end up not only with the monetary loss, but all the hassle, and the customer dissatisfaction, because even if u replace the bouquet they missed out on, by then it was 2 late and Mother's Day had already been "ruined" 4 them and nothing u can do can undo that, unfortunately...

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  5. Me too - last Thurs a person came by offering to trim our trees. He had come last fall and we had a long discussion then. We entered into a verbal contract and he asked for a post-dated cheque for Monday that 'would protect us both because I could always put a stop payment on it' and would cover part of his rent. He didn't come back so on Friday a.m. I stopped payment on the cheque. Later Friday he came back and I told him I had cancelled the cheque. He said 'good' and he would do the work and I could pay him in cash. Which I did - $300. Today I got a call from Money Mart and apparently he also cashed the cheque with them! I was trying to help someone down on their luck and instead he deliberately ripped me off knowing that I was retired and that even the $300 was a lot of money for me. I had no idea that having put a stop-payment on a cheque that wasn't even cashable before the order would still allow it to be cashed. Sherran

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  6. I have just been victimized by Money Mart as well. I do not understand how to government of Canada can continue to allow the Bill of Exchange Act to continue to exist. They are basically aiding all those scammers and fraudsters. Is there really nothing that can be done to change this Bill?

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  7. Recently a number of 30 year old cheques of mine(that was before shredding was popular and must have come out of a landfill) surfaced and were cashed at various Money Marts. after depleting my chequing account a bunch were returned nsf but low and behold MM just walked into one of my bank's branches and did a transfer from my savings. This after my stupid bank was already notified of these fraudulent cheques. Now my bank just says that they will TRY to recover my money. Really they will try. Money Mart is nothing but a criminal operation to facilitate criminal activities

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  8. You need to put a "stop ALL payments" on your account. they wont take you to court either. Tell them that if they try to go in your account they wont see a cent of their money. You have to get pushy with them because when they sense weakness they'll walk all over you

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