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#2006908 - 04/08/15 08:47 PM Fraudlent BP
vaforlovers Offline
100 Club
Joined: Nov 2004
Posts: 107
We have a customer that has deposited several bill pay checks into a savings account. The checks are issued from Payment Processing Center in Hickory, NC drawn on Northern Trust. They are each for $999 and some odd change. The items were not questioned by employees until she wanted to wire funds to an Arabic man in Africa. Her story keeps changing and has many holes as to how she received the checks and what she is doing with the cash. The first check was deposited April 1st and we haven't received it in our returns yet. We feel they are fraud and will not be accepting anymore. Especially when you contact the processing center and they state the profile has been flagged for fraud. The information received from the Payment Processing Center doesn't hold true either. They referred me to Green Dot which claims they have never heard of them and are not associated with them. We placed a 7 day hold on the funds but it appears they won't be returned within those seven days. What should we do?

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Deposits and Payments
#2006935 - 04/08/15 09:27 PM Re: Fraudlent BP vaforlovers
RockChucker, CAMS Offline
Diamond Poster
Joined: Jul 2013
Posts: 1,569
The Country
If you can't convince the customer it is fraud then I would send them packing. In the mean time consider what options you have to "freeze" the account.
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#2007221 - 04/09/15 08:23 PM Re: Fraudlent BP vaforlovers
SeekingKnowledge Offline
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SeekingKnowledge
Joined: Jun 2014
Posts: 152
SC
Perhaps a guru will step in and override me, but...
If you have acquired new information that affects your reason for holding a check, could you not reissue a hold notice to the customer (229.13(g)(1)(ii)) no later than one day after learning the information? And on such notice could you extend the held time to a reasonable period (229.13(h)(4)) as long as you are able to meet the burden of expectation as to why the longer hold period is necessary? In other words, because you have evidence the checks are fraudulent.

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#2008602 - 04/16/15 07:43 PM Re: Fraudlent BP vaforlovers
vaforlovers Offline
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Joined: Nov 2004
Posts: 107
Update: We have extended the holds based on the verbal information we received that the items are fraud. Green Dot has now verbally confirmed the items are fraudulent and they have a case open. I have been instructed to talk to the fraud department handling the case; however, you can't actually talk to them. They are well outside their time frames to return the items to us. So, with them not being able to return the items am I stuck releasing the funds to the customer with the gut feeling that it is fraud but no written confirmation to confirm? What do we do?

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#2008841 - 04/17/15 07:12 PM Re: Fraudlent BP vaforlovers
HappyGilmore Offline
10K Club
Joined: Jun 2004
Posts: 19,315
Pulling people out of the ditc...
While they are past the deadline for returning via normal channels, nothing prevents them from returning to you directly as without entry and you agreeing to honor the return and give them their money
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#2009625 - 04/22/15 08:58 PM Re: Fraudulent BP vaforlovers
WillyWonka Offline
Junior Member
Joined: Jun 2014
Posts: 30
Midwest USA
Hi - Just wondering if anything new has happened on your case!

Our bank had a customer bring in 32 bill pay checks totaling ~$40K a little over a week ago. Majority are at $1499 or closely under per check. Unfortunately, we took them in on deposit...

Everything about your story holds true for ours - Northern Trust, our customer wanted to wire to a foreign country, checks are Green Dot. Really weird scenario. Just wondering if you had any additional information!

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#2010151 - 04/24/15 04:59 PM Re: Fraudulent BP vaforlovers
vaforlovers Offline
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Joined: Nov 2004
Posts: 107
No additional news. The holds are releasing today so we will have to give the customer the money. Green Dot fraud department still will not return my phone calls or emails. So at this point with lack of contact I would have to reject any return that would later be presented and unwillingly give the customer the money because I have no hard physical proof to not. Of course we don't know what the customer really did with the funds. To top it off the customer also received a large tax deposit into the account that was not in their name either. The customer has walked out with a lot of cash not belonging to them but no returns on the items. This goes against all common sense that money doesn't just fall out of trees.

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#2010313 - 04/24/15 08:03 PM Re: Fraudulent BP vaforlovers
amberleigh Offline
Junior Member
Joined: May 2011
Posts: 34
Kansas
Is it at a SAR reporting level?

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#2010315 - 04/24/15 08:05 PM Re: Fraudulent BP vaforlovers
vaforlovers Offline
100 Club
Joined: Nov 2004
Posts: 107
Yes

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#2010404 - 04/27/15 11:44 AM Re: Fraudulent BP vaforlovers
John Burnett Offline
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John Burnett
Joined: Oct 2000
Posts: 39,336
Cape Cod
In the "would have, could have, should have" department, if your bank was aware that the tax refund was not tagged with your customer's name, you should have returned it. If you didn't become aware until you started researching the other activity in the account, you won't be held liable to the IRS.
Last edited by John Burnett; 04/27/15 11:45 AM.
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#2010435 - 04/27/15 03:01 PM Re: Fraudulent BP vaforlovers
vaforlovers Offline
100 Club
Joined: Nov 2004
Posts: 107
We were unaware of the name on the tax deposit until after we started the investigation. It posted with a correct account number. The refund did not come directly from the IRS but a 3rd party.

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