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There are countless examples of the overpayment scam on this StackExchange. Whereby the victim believes that they've been sent money and is asked to send some of it elsewhere, and then the original payment is cancelled, or reversed, or found to be fraudulent.

So, supposing you've received a cheque or a bank transfer that you suspect might try to be reclaimed in some manner.

What process do you go through, with the bank, in order to verify that the money is "real" and is "really yours".

Presumably an individual can't just randomly decide to reverse an old payment after any arbitrary period. (Otherwise I could reverse a payment made to Amazon 4 years ago!) Likewise, it can't be the case that fraud anywhere in the history of a payment causes a reversal of every movement of that money thereafter (otherwise victim's outbound transaction would also be reversed and they wouldn't lose out).

Clearly, if a scammer sent me money and then forgot to reverse the transfer, then 10 years later, that transaction can't possibly be reversed!

So ... what process would I go through to verify and finalise a transfer. If I wanted to do so.


Note. This is NOT a question about the advisability of keeping or using such money if I confirmed it was now really mine. Just about how to establish whether its now finally mine in the first place.

  • I read this question as essentially "which ways to give/receive money are reversible - and under what circumstances - and which aren't?", which is sort of addressed, but not exactly answered, by money.stackexchange.com/questions/107003/… – yoozer8 Apr 14 at 13:03
  • Ech, kind of, but not really – Brondahl Apr 14 at 13:07
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    The question is "I know that some methods are reversible ... but those methods aren't reversible indefinitely. How do you establish that a transaction is no longer reversible anymore". – Brondahl Apr 14 at 13:08
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    Also similar to When can I be sure a questionable check has cleared?. – glibdud Apr 14 at 14:19
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    @Brondahl: You seem to think you have a technical question, but "verify that the money is real and is really yours" is actually a legal question. The bank will always take the money back from you if they have a court order to do so. The answer does not change depending on the technical means of arranging the transfer. – Ben Voigt Apr 14 at 19:52
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What process do you go through, with the bank, in order to verify that the money is "real" and is "really yours".

This are two different things. The Bank will not decide if the Money is yours. When in dispute, a judge will decide.

So there are two approaches here:

  1. If you think that was an error, talk to the bank and tell them there has to be an error so they can cancel the transaction if possible.

  2. If you think there is a crime involved in making that money end up on your account, report it to the police.

There is no possible scenario where you can legally and without risk keep that money to yourself.

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As others have pointed out, the key distinction here is between when the payment system declares the transaction "final", and when the legal system considers you the owner of the money itself.

So, this assumption is correct:

Presumably an individual can't just randomly decide to reverse an old payment after any arbitrary period. (Otherwise I could reverse a payment made to Amazon 4 years ago!)

As a user of the payment system, you can't unilaterally reverse a payment outside of the time allowed by that payment system. Even within the time allowed, there may be a burden of proof that the payment was fraudulent, depending exactly how you made it.

But this assumption is much more shaky:

Likewise, it can't be the case that fraud anywhere in the history of a payment causes a reversal of every movement of that money thereafter (otherwise victim's outbound transaction would also be reversed and they wouldn't lose out).

You're right that the chain of transactions might well become impossible to reverse - most simply, if you take the funds out of a cash machine, there's no way for the machine to suck that cash back out of your wallet.

But if we're talking about fraud - or, more simply, stolen money - the mechanism by which it was moved is just a detail, the question is who legally owns that money. Regardless of how long ago you stole it, the money never becomes yours, and you owe the money to its rightful owner. And by "the money", I mean "an equivalent amount of money", because the whole point of money is that it's interchangeable, so there's no need to reverse each transaction in the chain.

So this conclusion is wrong:

Clearly, if a scammer sent me money and then forgot to reverse the transfer, then 10 years later, that transaction can't possibly be reversed!

Since the scammer presumably either stole or needed to launder the money, they're unlikely to take you to court to get it back. But if the money was stolen and sent directly to you, the person it was stolen from still owns that money, even 10 years later. They won't be able to just click a button and empty your account, but they will have the right to demand the money from you via the courts.

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  • In the case of 10 years later, you may be hitting statutary limits on recovering debts, depending on what jurisdiction you are in. – richardb Apr 15 at 17:09
  • @richardb True, I don't know enough about those kinds of limits to comment. – IMSoP Apr 15 at 17:12
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What process do you go through, with the bank, in order to verify that the money is "real" and is "really yours".

If the payment was made through a retail payment system (and wasn't, for example, a wire transfer), then there is none. See Treasury Regulation E and the EFTA. While in some cases, institutions are not required to reverse a transaction more than 60 days after the transaction appears on the statement, they still can and still do.

Presumably an individual can't just randomly decide to reverse an old payment after any arbitrary period. (Otherwise I could reverse a payment made to Amazon 4 years ago!)

Sure, they can. An individual can randomly decide anything they want. That doesn't mean the bank will agree to reverse it or that Amazon will agree to reverse it, but they can.

Likewise, it can't be the case that fraud anywhere in the history of a payment causes a reversal of every movement of that money thereafter (otherwise victim's outbound transaction would also be reversed and they wouldn't lose out).

Right. When a consumer complains of fraud or an unauthorized transfer, the entity that receives the complaint decides what to do and possibly contacts other entities involved in the transfer. They have contracts and laws that control how this is handled. Ultimately, all that matters to the recipient is whether they lose the money or not. That's what you really care about. That's determined by the recipient's contract with whoever delivered the money to them and the law.

So if you're concerned, check your agreement with your bank, payment processor, or whatever. I bet you'll find it lets them reverse payments long after they've been credited.

Clearly, if a scammer sent me money and then forgot to reverse the transfer, then 10 years later, that transaction can't possibly be reversed!

How is that so clear? What stops your bank or payment processor from reversing the payment if you're still their customer? Of course, if you're not their customer, they couldn't sue you after all that time.

So ... what process would I go through to verify and finalise a transfer. If I wanted to do so.

You must use a payment system that is capable of providing such payments. That does not include any retail payment systems in the United States.

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Ask the Bank

Banks take a certain amount of time to process the transactions behind the scenes.
Usually same-day, often a few days, anywhere up to a week.

So if you take receipt of the money and suspect the transaction might be invalidated in some way, wait a few days, then call the bank and ask if the transfer has been verified.
They can probably tell you!

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    What happens if the transaction has been verified, and two months later the other account owner reports it as theft? Can't it still be reversed in some cases? – Justin Apr 14 at 15:13
  • All my advice will do is confirm that it was a legal and valid payment as far as you and the bank are concerned. Whether the money came from a compromised account or not is not something you can really do anything to confirm. The account owner would report it, then the bank's fraud-division will investigate your account. They might get the police involved. It certainly won't be reversed without you being aware of it and having spoken to someone about it. – Ruadhan2300 Apr 14 at 15:33
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    Be very cautious about asking the bank. If you call up a bank and ask whether a check cleared, 99.999% of the time, the bank will answer the question of whether they'll allow you to withdraw the money. That is a very different question (and the imprecise terminology is a benefit to the scammers of the world). And even if the check clears, it can still be reversed later if there was fraud. The receiving bank has no idea whether or not someone has alerted the sending bank that the transaction was fraudulent and whether there is an active investigation. – Justin Cave Apr 15 at 18:42
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This might be a bit of a challenge to the frame of the question, but I find, the easiest way to make sure money won't mysteriously vanish from my account is to only accept money from reliable, trustworthy sources, whose reason for giving me money I can explain rationally. Doesn't matter how they're paying me, what matters is why they're paying me.

I don't accept money from random people I don't know, who send me emails out of the blue offering me cash to do something. I don't care what payment methods are being proposed, or how innocent the whole story sounds, or even how it might go awry and screw me. If I don't know them, I don't take their money.

I'm not going to waste my time trying to figure out how to do it without getting burned - this is their game, I'm not going to beat them at it.

I also don't sign up for "money for nothing" deals - sugar mommies, MLMs, anything the purports to earn me millions for sitting on my couch and being my own boss, or whatever. These offers may or may not technically be scams, but if they were really as good as they sound on paper, everybody would be doing it. My financial advisor (whom I know and meet with in person) would be telling me to do it.

Using this simple guideline, I've never had any trouble with cheques bouncing or money vanishing from my account unexpectedly. I'm sure such things do happen from time to time, even to people who were legitimately not getting involved in an outright scam, but based on my own experience at least, the frequency is low enough that it's not worth worrying about up front.

Handle it with the bank if it happens, but as long as you avoid the obvious scams (and IME most scams are pretty obvious if you spend 5 minutes thinking about why they're asking whatever they're asking), then it'll probably work out in the rare case that you need to deal with it.

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