What are the risks of using money sent to you by a scammer, once the transaction is irreversible

Question

Take as a premise for this question, that there does exist some process by which you can get a bank to confirm that a transfer is completely valid and irreversible. See here for any discussion of that premise.

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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, suppose that a scammer contacted you, sent you money (spontaneously - you didn't ask them to, nor agree to send it on anywhere), and you did the above process so that you now definitely have that money and it's safe and isn't going away anywhere.

Are there any reasons not to keep and use that money for yourself?

As far as you are concerned, you haven't been involved in fraud. "Some random person sending me money" isn't fraud; it's foolishness or ridiculous generosity.

If the sender "earnt" that money fraudulently, then that's none of your concern. A shopkeeper can still keep his profits from selling a newspaper to a mobster, even if that mobster's money is made illegally.

Answer 1

You didn't specify a country tag, so it is unclear which jurisdiction you ask about.

In most countries it is illegal to keep money that doesn't belong to you, and it doesn't matter how you got it. That includes a scammer that really sent you his own money (which they would never do, but that's the premise of the question).

It doesn't matter either if he sent you the money to scam you. The money doesn't belong to you, and you have to return it to the owner if he asks for it.

Your example with the shopkeeper doesn't apply; when buying a candy bar or a newspaper, the shopkeeper has no indication of the money being illegally acquired, so the sale is valid. But if a thief sells a stolen item to a shop, the shop has to return the stolen item, and is out of the money he paid for it; and if it's worthwhile, the police will follow up - just not for a small amount.

Answer 2

What you seem to be missing is that when a scammer sends you money, it is not the scammer’s money. He is sending you someone else’s money. That is why you can’t keep it. It is stolen money, and if you were able to keep it, you would be benefiting from a crime at the expense of another victim.

See this question, in which the OP (Victim #1) experienced someone producing a fake check drawn on his account. The check was sent to another victim. Victim #2 can’t keep this money. If he does, he ceases to be Victim #2 and instead becomes Scammer #2.

If, as you suggest, we assume that the third party is innocent, as they are not responsible for the fraud that the original scammer did, how would the first victim get paid back, who had absolutely no involvement whatsoever? What would prevent the third party from doing this over and over, “innocently” profiting from these scams?

Answer 3

This is not quite as hypothetical as you might think, although it's almost impossible not to challenge the premise of "can't be reversed".

Take this story in the Guardian where someone accidentally paid £1000 a month for two years into somebody else's account, and the recipient withdrew the money as cash.

The bank did try to reverse the transactions, but could only do so with the available funds (apparently, only the most recent transaction was still in the account).

More importantly though, there was absolutely no question that the recipient legally owed the accidental "donor" the full amount. As quoted in another article, which mentions US and New Zealand cases that ended with prison sentences, it's "like stealing a car and saying it's the fault of the owner for leaving the keys in". If you know the money is not yours, and spend it anyway, that's theft.

The only defence I can see would be if you could claim, under oath in a court of law, that you believed the money was honestly given to you as a gift. If you believed it was an error, or part of some transaction that was never completed, you knew the money wasn't yours, and you are liable to pay it back.

Which brings us back to the concept of an irreversible transaction: even if the bank has no way of recovering the money, a court could still demand that you repay it, so does it really mean anything to say it's irreversible?

Answer 4

At some point the police may contact you or the bank and want to retrieve the money. They will probably investigate you to determine if you are involved.

If the money magically appeared and you had no idea why it was there, then you should report the mistake to the bank. If you are going to claim you didn't notice the deposit, still expect that the bank will remove the funds deposited into the account.

If you did have an interaction before the money was sent to to your bank, you are going to have to explain what you knew and didn't know about the person. That investigation might take a lot of time, and you might be a suspect, or even get charged. They will still take the money from your account.

The scam is that they are sending money from a sucker to you, and then getting you to send the money to them in an untraceable way. The authorities are tracing the funds directly to you. So you will have to get involved. You also might need a lawyer.

Also you might not be able hide behind the apparent inability to reverse the transaction, that applies to the senders ability to reverse the transaction. That doesn't necessarily apply to a valid legal authority and fraud.

Answer 5

What are the risks of using money sent to you by a scammer, once the transaction is irreversible.

1. Since you have gone on public record here that you have strong indication that this money is stolen, you could be the object of a criminal investigation and possibly convicted of a crime

2. The money could be taken from you at a later stage through a court order.

3. You could get an entry in your criminal record and lose you job etc...

4. If 1-3 does not happen, you´d have to file taxes for this income. I doubt there is an income category for illegally acquired money in the UK so that could get interesting.

Also it is not true that you can keep proceedings of a crime that you got unknowingly. If you are in possession of a stolen good, it will be take from you even if you just bought this with your own money. The one you have to direct your demands towards is not the victim but the gangster that stole the thing and sold it to you. good luck getting your money back from them.

Answer 6

Scammers will typically never allow a transaction to progress to a point that it is irreversible. In other words, you will never actually get the scammers money.

What you will get is a cashier's check that looks like it came from a reputable source. You can deposit it, and you can withdraw cash from YOUR bank while the check is waiting to clear. However, the check never will clear, and when it doesn't, the funds will be debited from your account.

If, just if, the funds did clear, it becomes a legal question as to what conditions were set for you to receive and use the funds. Scam or not, there was some implied contract between the parties for you to receive this money and if you fail to meet your obligation they could have a case against you.

Answer 7

I need to frame-challenge your assumption that the scammer sends the scammer's own money. That never hapens. The scammer sends someone else's money (the victim), or nonexistent money such as a forged check.

You're screwed a couple of ways.

Lack of good faith

You know perfectly well that the money is scam-sourced money. And you are taking it anyway. This represents a lack of good faith on your part.

Yet you are claiming that the bank owes you good faith in terms of honoring the check, and not reversing it in favor of the victim.

Pot kettle black, or, in legal terms, unclean hands.

Duty to mitigate

Since you are well aware it is fraud, you have a duty to minimize the damages and suffering to the victim, i.e. By trying to defuse the fraud, warn them about it, or at the least, refuse the money.

Since you could have mitigated their damages, and failed to do so, you are liable for them.

Lack of any quid pro quo

A contract isn't a contract unless there's a quid pro quo: you get a benefit, and your partner gets a benefit.

You have a situation where you get a bunch of money, and the victim doesn't get anything at all from you. So no bona-fide contract.

That reduces you to claiming that this stranger who does not know you, gave you a gift for no reason, and promptly refuted that gift, in circumstances that look, walk and quack like fraud, and you cannot show any evidence of a bona-fide relationship which might inspire such a person to do such a thing. That dog won't hunt.

So yeah, the victim can boomerang the money back at any point they can get the bank to help them, and the bank owes you no good faith.

Further, they can sue. And just to remind you, many jurisdictions have triple damages for fraud.

Answer 8

You have tagged the question as UK-based, so you would immediately fall foul of the 1968 Theft Act. Read this story on the BBC News site for a very good summary of the situation by Prof. Robert Chambers. While the situation in the story differs in that the person found guilty of theft found the money in a shop, your situation would be even more legally perilous. The relevant part of the story is the following:

"A person's appropriation of property belonging to another is not to be regarded as dishonest… if he appropriates the property in the belief that the person to whom the property belongs cannot be discovered by taking reasonable steps."

The definition of "reasonable steps" would differ depending on the location where the discovery was made, Prof Chambers said.

"If you are on the street you could reasonably believe you don't have a chance of finding the person who lost what you found," Prof Chambers said. "Whereas if you find a lost object in a shop it may not be so difficult to find the person who lost it [by asking in the shop]."

You would have no chance of claiming you didn't know who the money came from or that you couldn't easily trace them, and since you don't have any legitimate reason to expect a deposit of funds from that person, it is essentially "found money" and you must make at least a reasonable effort to trace and inform the "donor".

Full disclosure: I am not a lawyer but I have come across the principle of theft by finding in the past and the law is pretty clear.

Answer 9

Real life example of a woman who kept $50k sent to her by a scammer. The facts are in the article, but the gist is that a man sent the woman $50k with instructions to carry it across the border to his "boss's associates". The woman spent $1000 on herself and disseminated the rest apparently to other scammers. Eventually the victim of the original scammer alerted the police, who caught the woman.

The last paragraph gives the possible consequences. By Singaporean law (which is where this happened):

For dishonestly misappropriating the money, she can be jailed for up to two years and fined.

Answer 10

As far as you are concerned, you haven't been involved in fraud. "Some random person sending me money" isn't fraud; it's foolishness or ridiculous generosity.

The problem is not someone sending you money. It's you spending money that you know you are not entitled to.

If the sender "earnt" that money fraudulently, then that's none of your concern. A shopkeeper can still keep his profits from selling a newspaper to a mobster, even if that mobster's money is made illegally.

Someone can only give you what is theirs. I cannot give you what is not mine. If you have reason to suspect that I tried to give you what is not mine, you have reason to suspect that it is not yours.

Also, as mentioned in the other question, the premise is not realistic in the United States. All retail payment systems are required to support appeals for unauthorized transfers for more than 60 days and most support them for longer than that. Only a wire transfer or blockchain cryptocurrency payment is likely to be really irreversible.

And, as Zach Lipton points out, you could get sued by whoever the money really belongs to. Even if that doesn't happen, the institution your account is with could choose to close your account and hold any funds that happen to be in it. You may then find you have difficulties opening accounts at other institutions and they won't tell you why, but this will be why.