16

I agreed to cash a cheque for someone I don't really know. In hindsight, this was very stupid, but now I need to figure out how best to get out of this situation.

We both endorsed the cheque, it cleared and the money is in my account. But now I'm concerned that the cheque may have been fraudulent, especially since the name on the cheque doesn't seem to be the name of the person I spoke with. (I didn't notice this until I examined the cheque online later.) So I'm very uncomfortable about giving her the cash, in case there is a chargeback.

But if it is a legitimate cheque, then I owe this person a non-trivial amount of money. So I can't just refuse to pay her unless I'm sure it was a bad cheque.

The person is pressuring me for the cash. Giving her the cash seems risky, but I can't put off paying her indefinitely. What should I do?

  • 11
    Pressuring you can be a sign of bad things to come, but honestly, it could also be because you have a significant amount of money. This was a terrible idea. – Kortuk May 17 '12 at 18:52
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    It would be very useful if you explained the circumstances involved in meeting this person and getting this check. – stoj May 17 '12 at 23:28
37

You need to stop what you are doing right now and cut off contact with them!
This is an extremely common scam.

Here's how it works:

  1. They give you a check, maybe even a certified check. Usually in payment for something they are buying from you. The check happens to be for more than the sales price.

  2. They ask you to refund the difference, and pressure you to do so quickly. You will see why in a second.

  3. The check deposits fine and the money shows up in your account. Assuming the bank wouldn't do that if it wasn't a good check you let your guard down and pay them.

  4. In a couple of weeks, the bank detects that it is a fake check. They remove the money from your account, and may even report you for prosecution to local authorities for passing a fraudulent check.

  5. Meanwhile the person has the money you gave them and you can't find them because they gave you a fake name. To add insult to injury they may also have the property you sold them.

  6. You feel like a chump.

Variants of this scam include them asking you to cash a check for them and you get to keep a part of the proceeds for your trouble. Sometimes it is presented as a work-at-home scheme.

If you feel you absolutely must complete this deal, and you shouldn't. I would suggest you ask the person for a couple of forms of picture ID and tell them you need to make sure they aren't a scammer and you are going to do a background check on them with your local police to protect yourself. I predict the person will disappear and never contact you again about the money.

Also, I suggest you talk to your bank immediately and inform them you think you might have been a victim of a scamming attempt so that you don't look like an accomplice when this is all said and done.

  • 5
    in the unlikely event that it is legit, the person is pressuring the OP for the cash can wait 6 months. If they wanted the money fast, they should have gone to the bank themselves. – emory May 18 '12 at 4:15
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Its a classic sign of fraud. The fraud is on you. You cashed the check not given to you, and not endorsed by the person its given to, so even if the check is legit you're still in trouble.

There are many variations of this scheme, but the common thing is that the "innocent" third party is given a check to cash, and gives its own check or cash in return. The check ends up being forged, stolen, or otherwise invalid, but the cash/check the third party gave is long gone. Usually its cash, because its untraceable.

You should wait at least a couple of weeks to make sure the check doesn't bounce. You might want to contact the check owner to verify its legit, and suggest to return the money, if it is not. You might also want to consult with an attorney.

Bear in mind, that it might be reported to the authorities as a money laundering scheme (which it very well might be), and you'll have some explaining to do in this case, even if the check is legit.

  • Would it help to go to the bank and explain the concerns? – MrChrister May 17 '12 at 21:41
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    Note that bank managers are often known to say the funds have cleared in such a case when it later turns out they have NOT yet fully cleared. The liability still remains on the person cashing the cheque. To be clear, the bank managers are mistaken, not (generally) participating in fraud. – ChrisInEdmonton May 17 '12 at 21:46
  • @MrChrister I don't think the bank really cares. Its not their problem. If the check is bounced, they'll just charge the OP's account and be done with that. They're not a side to the transaction, they're an instrument. – littleadv May 17 '12 at 22:15
  • I see. I was wondering if they could expedite the process of verification, or at the very least have a record of concern to avoid legal troubles in the case of fraud. – MrChrister May 17 '12 at 22:37
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    @MrChrister I believe it depends on the paying bank, not the OP's bank. Also, if the check itself is genuine (i.e.: the account exists), but the signature is forged, it may take some time for the account owner to notice and dispute, and without actually talking to that account owner (as I suggested), its hard to expedite that. – littleadv May 17 '12 at 22:48
5

I would go to the bank and just express the concern that the check sent to you might not fully clear. You don't want to spend it until you're sure it cleared. I'd ask for a manager to tell you when it will clear, then confirm after that date that it's cleared, with the same guy. Perhaps someone in the industry can explain how long the bank has before deciding the check is bad. 10 days? 2 weeks? Really, it should either clear or bounce by the second night.

I'd not risk doing this for anyone. Anyone I know personally can cash their own check, and I'd not get involved with anyone I don't know on a financial matter like this.

EDIT - See Littleadv comment below. Good checks clear fast, a forged check has time for the victim to go to the bank and challenge the signature and cashing of the check. The victim can have 60 days to do this. That's the issue, I am wrong, the bank manager couldn't confirm the check was good so soon.

  • 5
    it will bounce within 2 days only if the ACH fails, i.e.: the account doesn't exist. Otherwise, the account owner will have to act to have the check bounced. Insufficient balance might also have the check bounced, but not necessarily, and not always automatically. So no, 2 days is definitely not enough, and even 2 weeks might not suffice to be certain that its not going to be suddenly bounced as forged. Account owners usually have 30 days after the statement to dispute charges, and it may take another X days for the dispute to propagate to the OP's bank, so it can take more than 2 months. – littleadv May 18 '12 at 0:44
  • 2 Months? This is the warning the OP needs to heed. So, I can cash legitimate checks and they clear in days, but a forged check can take pretty long to have certainty it won't be disputed. This seems the nature of the scam, the push for the money that eventually gets sucked away. – JTP - Apologise to Monica May 18 '12 at 2:01
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    If a legitimate check written by Cheney Dick on Cheney Dick's legitimate account and payable to Jane Doe is intercepted by Wade Roe and endorsed over to user6344 who deposits it, it will clear in two days. Cheney might balance his checkbook and not even look to see who actually got the money until Jane Doe calls him up a month later demanding "Where's the check you were going to send me?" and he responds "I sent it to you and you cashed it" and they argue about it and finally come to the conclusion that the check was stolen. It could be 6 months before the query gets back to the OP's bank! – Dilip Sarwate May 18 '12 at 12:45
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    Dilip - the OP is in quite the jam. I hope others read this before making such a mistake. – JTP - Apologise to Monica May 18 '12 at 13:24
4

In absence of complete information, I can only speculate that your phrases

We both endorsed the cheque,

and

especially since the name on the cheque doesn't seem to be the name of the person I spoke with.

mean that the check was payable to Jane Doe but was endorsed by someone you know as Wade Roe using language such as "Pay to the order of user6344" and then you endorsed it as something like "For deposit only to Acct# 1234567890" and gave it to the bank teller with a deposit slip for Acct# 1234567890. Presumably Wade Roe did not accompany you to the bank and the bank teller did not notice that the check was not endorsed to you by Jane Doe, or she did go with you to the bank but the teller did not check her ID when she endorsed the check. In any case, you, as a customer of the bank, are definitely on the hook in the sense that you in effect guaranteed the validity of Wade Roe's endorsement of the check payable to Jane Doe. You presented the check to the bank as a legitimate check that you were legitimately entitled to deposit in your account. In effect, if fraud was committed, you committed the fraud by depositing a bum check. As all the other answers have said, you need to go down to the bank and talk to a bank officer, preferably the manager, right away. Don't go to a teller (even though in many banks, the tellers have job titles like assistant vice-president.

  • 3
    It may well be worth talking to the police. You'd probably want to talk to someone in commercial crimes, rather than just a regular police officer. I'd be remiss if I didn't recommend consulting a lawyer, too. Probably before you talk to the police, given that you (OP) may have committed fraud. – ChrisInEdmonton May 18 '12 at 2:06
  • In the US it many time includes postal/wire transactions, so its more in the domain of USPS Inspectors and the FBI, rather than the local police. – littleadv May 18 '12 at 2:40
4

I would contact the security/fraud departments at your bank and see if you can get in contact (via your bank) with the bank that the check is drawn on. By my reading of your question, it sounds like the person you are dealing with fraudulently endorsed a third party check, which you subsequently endorsed for deposit. Explain this situation to your bank.

As far as the other person goes, tell her "I'm in contact with the frauds department at my bank, as the validity of the check is in question, and I'm not giving you a cent until the matter is resolved."

Depositing a bad check is a misdemeanor in most jurisdictions, so it's essential to bring this to the attention of the bank and authorities asap.

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