Checking Account Messed Up by Scam

[lionesswood]

What is the name of your state? AR.
I have a friend who lives in Arkansas whose financial life has really been messed up by a scam. She was already having financial problems when she received an e-mail from a man who got her e-mail address on the Internet from a message board or chat room. This man claimed that he was a preacher who lived in Canada who wanted to help her out financially by sending her a check. When she did receive a check from him for $8000 in late April 2005, she deposited the check in her checking account. When she checked her balance at an ATM the next day, I it said that she now had $8102 in her account, she was overjoyed. She was now able to take her car to get the almost $300 worth of much-needed repairs done to it that she had not been able to afford previously. She paid the repair shop with a check that she wrote for $295. The next week after giving the repair shop the $295 check, she received a notice from her bank in the mail that the check had been returned for insufficient funds. She drove down to her bank to talk to the branch manager to find out what had happened. The manager told her that the $8000 check that she had deposited in her account was a bad check, & that's why the check that she had written had bounced. She was shocked & told the manager about the man who had e-mailed her & that she thought that it was a good check. When the manager asked whether this man had wanted her to send any money to him, my friend did say that the man said she should share some of this money with others who were also less fortunate, but she did not understand the man's request & did not send any money to anyone. That's when my friend realized that this was a scam. Fortunately, the people at her bank knew her & did not get her in trouble with the law. However, for some reason, when she deposited her disability check (Her back got seriously injured a couple of years ago, & she has a lot of trouble walking.) in her account & wrote checks to pay her utilities, it took almost 2 weeks for her checks to clear. Her bank was holding the $295 repair shop check & that may have been the reason for the slow down. That is when she called me & told me what had happened to her. I really wanted to help her, but I am a little strapped financially myself & was not able to send her any money. I am glad that her brother in Texas was able to mail her a check for $300 to pay the repair shop with. She received his check 3 days ago on Wednesday, & deposited it in her account. As of yesterday (Friday), his check had not cleared yet. So sorry to be long-winded, but here is the question for the forum: Will the check from her brother which will finally pay the repair shop, get her checking account back to normal, or will her bank never trust her again & take an extraordinarily long time to clear all of her checks from now on? I feel so sorry for her, because none of this was really her fault. I blame that scam artist from Canada for all of this trouble.

 

[Veronica1228]

What is the name of your state? AR.
I have a friend who lives in Arkansas whose financial life has really been messed up by a scam. She was already having financial problems when she received an e-mail from a man who got her e-mail address on the Internet from a message board or chat room. This man claimed that he was a preacher who lived in Canada who wanted to help her out financially by sending her a check. When she did receive a check from him for $8000 in late April 2005, she deposited the check in her checking account. When she checked her balance at an ATM the next day, I it said that she now had $8102 in her account, she was overjoyed. She was now able to take her car to get the almost $300 worth of much-needed repairs done to it that she had not been able to afford previously. She paid the repair shop with a check that she wrote for $295. The next week after giving the repair shop the $295 check, she received a notice from her bank in the mail that the check had been returned for insufficient funds. She drove down to her bank to talk to the branch manager to find out what had happened. The manager told her that the $8000 check that she had deposited in her account was a bad check, & that's why the check that she had written had bounced. She was shocked & told the manager about the man who had e-mailed her & that she thought that it was a good check. When the manager asked whether this man had wanted her to send any money to him, my friend did say that the man said she should share some of this money with others who were also less fortunate, but she did not understand the man's request & did not send any money to anyone. That's when my friend realized that this was a scam. Fortunately, the people at her bank knew her & did not get her in trouble with the law. However, for some reason, when she deposited her disability check (Her back got seriously injured a couple of years ago, & she has a lot of trouble walking.) in her account & wrote checks to pay her utilities, it took almost 2 weeks for her checks to clear. Her bank was holding the $295 repair shop check & that may have been the reason for the slow down. That is when she called me & told me what had happened to her. I really wanted to help her, but I am a little strapped financially myself & was not able to send her any money. I am glad that her brother in Texas was able to mail her a check for $300 to pay the repair shop with. She received his check 3 days ago on Wednesday, & deposited it in her account. As of yesterday (Friday), his check had not cleared yet. So sorry to be long-winded, but here is the question for the forum: Will the check from her brother which will finally pay the repair shop, get her checking account back to normal, or will her bank never trust her again & take an extraordinarily long time to clear all of her checks from now on? I feel so sorry for her, because none of this was really her fault. I blame that scam artist from Canada for all of this trouble.

Your question is very difficult to answer because you are not even sure why the utility check took two weeks to clear. You suspect it is because of the repair shop check, but I don't see any proof of that.

I would say, however, that if your friend has now made good on the repair shop check that she should be fine. Please advise her that she should never fall for scams like this. She just got very lucky that she didn't send the person with the check any money or she would be in serious financial trouble right now.

 

[Ladynred]

Her first mistake was assuming that the $8,000 check had cleared in less than 24 hours !!!! The bank may have said the funds were available, but they NEVER clear that fast. Had she waited at LEAST 3 days or more, this would never have happened. Thank God she only got nailed for $300 !! Not to mention taking that kind of money from a complete stranger.. how naive can you get ?? I hope she never answers any emails from people in Nigeria !!

While the new Check21 law means that checks that you WRITE are immediately taken out of your account (or almost immediately), it does NOT mean that checks you DEPOSIT are cleared and available in the same time frame. In fact, the same old 5-10 days for clearing deposited checks still applies, especially for out-of-state checks. Your friend needs to wait before she starts writing checks against those funds unless she has the funds to cover the amount herself. While I"m sure her brother's check is just fine, she still needs to be careful.

AS far as the bank 'trusting' her, its not about trust, its about computers and procedures. Whether they know her or not, they are going to stand on policies and procedures.

 

[Veronica1228]

Just an FYI, Check 21 is not mandatory therefore, some checks still clear the old fashioned way. There are smaller C.U.s and other F.I.s that are not required to clear checks electronically.

Also, while it is a good rule of thumb to wait at least three (or even 5) business days to make sure a deposit is not returned, F.I.s can take up to 6 months to return an item in some cases.

I would suggest verifying any item before depositing it into your account especially if you do not know the issuer very well. Funds verification is usually automated at most banks and takes about 5 seconds.

 

[Ladynred]

Thanks Veronica I thought Check21 WAS mandatory, but you're the banking expert

I'll have to remember that about funds verification, I wasn't aware they could do that. If they can do that, and know right away if the check is any good, why doesn't a check like that just bounce right away ? It would make sense that that kind of verification would be done before its even deposited.. but I guess the banks probably don't want to do that ??

 

[Veronica1228]

Thanks Veronica I thought Check21 WAS mandatory, but you're the banking expert

I'll have to remember that about funds verification, I wasn't aware they could do that. If they can do that, and know right away if the check is any good, why doesn't a check like that just bounce right away ? It would make sense that that kind of verification would be done before its even deposited.. but I guess the banks probably don't want to do that ??

If you mean, why don't banks verify every check that is deposited, well that would be impossible. We would have to add additional staff and that would not be cost effective. Especially when you consider that for the most part it is not the bank that would suffer a loss from bad checks that are deposited, it would be the depositor. Banks may verify funds when cashing a check, but for a deposit it is just not worth the trouble.