Well, this is good to know (I’ve always wondered what obviously fake Craigslist job ads were there for – just for spamming, I assumed. Now I know better).
It depends on the cirsumstances…
If you knowingly wire money to the scammer, then that clearly its on you. That money is gone, and there is no do-overs on your part (unlike Paypal or Credit Card transactions , wire transfers have no anti-fraud guarantees or the like).
If on the other hand they get hold of your account number + sort code, and fraudulently withdraw money without your permission then its the banks fault. They should do more ensure the identity of people who withdraw money claiming to be one of their customers. I imagine there would be a lot of paperwork involved (unlike getting a refund from a Credit Card company in a similar situation)
, but you should get your money back eventually.
You are absolutely correct, they should be encrypted, and CVVs are not supposed to be stored at all.
But my point is that every time you use your card or write a check, there is that one opportunity for someone to use that information, and statistically it just doesn’t happen that often. I have used a credit card hundreds of times a year for over 25 year and each time is an opportunity for a crooked clerk or waiter to steal my credit card number, and I have had only a single fraudulent transaction. I have also written thousands of checks in the same time and have never had a fraudulent transaction on a checking account.
My post was in response to concerns people have expressed that there are opportunities to steal bank account information if you write a check.
Yes, that’s how this scam works. People assume that if the bank cashed the check then the bank has taken responsibility for making sure the check is valid.
Wrong, wrong, wrong. The bank gives you $3500 real money, you wire $3000 to the crooks and keep $500. And the bank and courts will find YOU responsible for all $3500. Lots of people get taken this way every day.
Think of it this way; if you write a bad check at a business and the business deposits that money in the bank and the check bounces, the BUSINESS is out the money and has to try to get you to pay or turn it over to the law and have them come after you.
So after you have wired the money to the scammers they and the money are long gone. Who are you going to go after? Who is the law going to go after? Nobody. You are out all the money just the same as the business would be if they can’t find you after writing a bad check.
The bank doesn’t eat the loss, you do.
Where did “Red Oak Capitol Management” want the check sent?
Rob
How is this legal? If they can still say “oops, our bad, that check wasn’t good after all” two weeks later, then the money isn’t actually available to you for two weeks, and they’re lying to you when they say it is.
And more to the point, in this day age, how come it takes anywhere near that long to verify this kind of thing ? Everything is computerized, surely ? So it should be a matter of seconds, from the point where the check is scanned and OCR’ed, to verify that the account exists and has the required funds ?
Plan B.
Deposit the check and let it draw interest until the bank decides to take the principal back.
Yeah, I know. The bank charges a bounced check fee to the recipient as well.
Here in the UK one scam people have been falling for, is faxing / posting details of their bank acct no. / branch sort code / and a specimen of their signature.
This is usually in response to the ‘We’ve traced you as the last known descendant of … and he had millions deposited here … etc’ or ‘We need to use your account to move a large sum and will give you a percentage.’
See that is the beauty of the scam. Banks used to hold large checks for an inordinate amount of time and take advantage of the money. So the regulations were changed to make your money availalbe to you sooner. And some of these fraud checks are very good. But it takes weeks to verifiy an overseas check. It is your responsibilty whether the check is good.
I don’t make the rules, I just try to understand them. Call your local bank and ask them; under what conditions is the bank responsible for my giving you a bad check?
In essence the bank is giving you a loan based on the collateral (check) you have provided.
That would be smart. And you could only be out a few dollars that way if you just left it all in the bank. But there is ALWAYS a real urgency and push, push, push from the scammers.
Here is a helpful link from the Federal Trade Commission:
Oh my god. And I’ve been mad at banks for holding my money for a few days to make a few pennies’ profit off of 72 hours of my inconvenience. It used to be weeks? Banks are such scams! And I don’t think any of that will change following the financial crisis (which itself was precipitated by financial institutions living off bullshit). It’s ironic. The centerpiece of capitalism is the part that’s most lacking in competition, transparency, etc., and therefore is full of more dysfunction than the used car business.
Well, isn’t the whole point of the scam that all the money is returned from the person who tried to cash the check? So all is right with the world, unless the recipient already spent/sent the money.
I think this works not when the check is totally bogus, but when the account/routing # on it is real and looks legit, and the account owner notices the missing funds sometime later.
You won’t draw any interest on the check. Any interest which would have been credited would be reversed when the check bounces.
I’m not in banking, but that doesn’t sound right.
Interest on my accounts are paid on the average daily balance of the month. So while the bank could of course discount the check once it’s discovered to be fake, I don’t think they do. I’d certainly love to hear from someone inside the system on this one though.
Unless you’re very clever, and get The Peoples Court to cover it. There was one case where a women got the fake check, but she got her sister to make the bank deposit. The first sister wouldn’t pay the money back, so the second sister took her sibling to court. The first sister obviously lost, but if I understand the way the show compensates the participants, it was the show that ending up reimbursing the sister who got scammed, and the “losing” sister got to keep the money she had originally gotten. She might have also gotten some appearance money.
Luckily for you, I’m in banking.
Interest is paid on the average daily balance. However, the funds that you’re talking about won’t be included in that average daily balance because they were never collected.
Sorry, to late to edit…
If the interest was credited in one month, it would be reversed in the second.
Think abou it like this. If you were right, what is to stop you from depositing a bogus $1MM check into your account and collecting the interest on it (and only being out the bounce fee) untill the bank finds out it’s no good.
I do see your point. So at what point does a deposited check start counting towards the average daily balance?
When the check clears the account it’s drawn against? Unfair to the depositor.
When it’s deposited? Unfair to the bank if it bounces.
Let’s just skip all this and go to plan C. You write me a million dollar check. I’ll write you one of the same. We’ll deposit them at the same time and let them drag up the average until they process and cancel each other out.
And none of that nonsense about check kiting being illegal.
Sounds like a good plan. Why don’t you send me your routing number and account number, as well as the last 4 digits of your SSN, and mother’s maiden name. (I just need that info for my records.)
Just to answer your question, the deposit will start accruing interest on the day it’s deposited, HOWEVER if the check bounces, that credited (or earned but unpaid) interest will be reversed from the account.
The system will do it automatically by basically going back in time and saying, “Hey, I’m going to recalculate the interest like this check was never deposited! I’m also giong to charge a fee for all of this work that I’m doing!”