State Sec. Check Cashing, Inc. v. American General Financial

Facts

On June 20, 2007, a man contacted American General by telephone purporting to be Ronald E. Wilder. The imposter inquired about receiving a loan while using the stolen identity of Mr. Wilder. After submitting certain documents, American General approved the imposter for an $18,000 loan. The imposter went into the American General office, presented identification and received the $18,000. Later that afternoon, the imposter went to State Security to have the check cashed. The employee there called State Security’s compliance officer who instructed her to verify the date of the check, the name of the payee, the address of the licensee, the supporting loan paperwork, and whether the check matched other checks. These steps were all completed and the employee cashed the check, minus State Security’s fee of 3-5% of the face value of the check. On Monday, June 25, 2007, the real Mr. Wilder contacted American General regarding the fraud and American General immediately contacted the drawee bank to stop payment on the check it had issued to the imposter. The drawee bank successfully stopped payment, leaving State Security without compensation for the $18,000 check it had cashed for the imposter. State Security sued American General to recover on the fraudulent check.