I too am sorry that you had to learn of this scam first hand, but trying to put the blame and/or burden of prevention on banks is wrong and as noted if passed will result in very negative service when it comes to cashier checks. The first line of defense is the customer. As the old saying goes "if it sounds too good to be true, then it probably is".

I'm not going to be as nice as the other posters, but banks and other financial institutions cannot be held responsible for the general public's lack of scrutiny, or in the case of most of these scams the customer's GREED.

I would like to thank you for seeing that there is a problem here, and maybe together we can think of a more workable solution to the problem of counterfeit cashier's checks.

In my case, when I went to deposit the check I asked how long it would be until the check was clear, and the teller responded that the funds would be available in 24 hours. I then restated my question telling him that I wanted to know not when the funds would be available, but when I could be sure that this was a good clear check and I could use the money and never have to worry about it coming back and bite me in the butt, and the teller said "Tomorrow afternoon ma'am.  No problems". I waited 48 hours, twice the time I was told by the teller would be enough. It was one week after the date of deposit that the bank called and told me that the check was counterfeit.

Now,if the bank teller would have said "Funds are available in 24 hours but it may take up to 7 - 10 days for the check to be clear" then I would have waited 10 or more days to go ahead with the transaction. Would it really be that hard to require tellers to inform customers of the true time for check clearance, not just funds availablity?

I have seen and heard of some banks that are not releasing any of the funds until they can confirm that the check is clear. They not only want to protect themselves but also their customers. If it is too much to ask all banks to do this, then a simple notice would to each person depositing a large dollar amount cashier's check would help cut back on this scam too. For any of you that already do this, please feel free to refer your customers to my site at http://www.geocities.com/scamvictimsunited/ if they have any doubts. Maybe once they see that their are hundreds of us, and those are just the ones I have found, that this has happened to in the past few months they will see it is a scam.

Another idea that was brought up by the victims support group I started was a signed release. If a customer wants to use the funds from the check before the check has been cleared they have to sign a release saying that they take full responcibility if the check comes back bad. That way people who are doing legit business and know the person who gave them the check could sign that release and get the funds right away. I know if my bank had asked me to sign such a release I would have not gone through with the transaction as we did.

To me, these seem like very simple things that the banks could start doing right away to help stop this scam. I have seen the support of Western Union and car websites in fighting this scam . . . Western Union will block a name once it is reported as being a part of these scams so when anyone else who tries to wire to that same name it will not go through, and the car websites are posting warnings about this scam for the people who are using their sites to sell their cars. It was a very simple thing on their end, but it has saved hundreds of people in the past two months alone.

We need to find a way to beat these scammers at their own game and protect everyone . . . banks and customers.

Thanks,
Shawn Mosch
There is strength in numbers. Scam Victims United
http://www.geocities.com/scamvictimsunited/

What would elevate this if a show such as PrimeTime Live, 20/20, or 60 Minutes would do a piece on this. Hopefully, it wouldn't deteriorate into a "bank-bashing" piece, but should show the story that banks AND customers need to work together to fight this growing crime.

If the story could be picked up on local news shows, and perhaps hit the front page of Yahoo, MSN, etc., then more people would be aware.

BOL does a great service in producing the list (alphabetically and chronologically) of reported stolen and counterfeit Official Items.

If you get a chance, take a look at the "Cashier's Checks from Tax Refund Company"? thread in the General Forum to see the quandry banks are placed when a customer presents an item and expects immediate credit.

In the case of the teller who responded to your questions, she may have been expressly instructed that all Cashier's Checks get immediate credit. Perhaps that bank just got stung in an exam or internal audit. Understand that a LEGITIMATE Cashier's Check cannot be returned as NSF. So the REAL question to ask is "How do I know if this is a legimate cashier's check instead of a forgery." I would hazard a guess that if you had posed the question in that manner, (using the word "forgery") the teller would have, at least, referred you to a supervisor.

Believe me, banks would like to place a hold in certain situations, but unless we can fit the situation into one of the current Reg CC reasons, we are somewhat stuck.

Don't even get me started on those credit-card advance checks.....

>>but banks and other financial institutions cannot be held responsible for the general public's lack of scrutiny, or in the case of most of these scams the customer's GREED.>>

I am just wondering . . . where is it that I was being greedy? When I found this site and this message thread I was glad to see that their were some people in the banking business that saw this as a problem and a scam, but I take great offence to anyone that says I was being greedy. If you would like to take the time to read my story, my husband and I were selling a car. We were sent a cashier's check for payment of the car and shippment of the car to the buyer. The bank told us to wait 24 hours, we waited 48 hours, and then once we had been assured that the check had cleared by our bank we sent the portion that was for transportation of the car to the shipper. We keep the amount we were asking for the car, nothing more. Where is the greed in that?

I think that the banks should be held responsible for telling me that the check would take only 24 hours to clear and be verified as good when they knew it was different. I work in retail, and just last month we had a cashier tell customers that the sale we were running went until the end of the month, when it really ended on January 26th (the last Sunday of the month)but when those same customers came back in this past weekend and wondered why things were not ringing up at the sale prices, we honored what they had been told by our employee and gave them the sale prices. It was not the customer's fault that the cashier did not give them the right information.

Yes, these check scams are on a much bigger scale, but the basic idea is the same . . . tell the customer the truth and if you mess up and give them the wrong info then you should be accountable for it. It is called customer service.

Shawn

I apologize for the anonymous posting, but we as bankers obviously have some risk in this area.

Why don't we tell a customer when a check will clear? Because there is no way we can know for sure when a check will clear. A bank may have a right of return on an item for up to one year if the right set of circumstances exist. Would it ever be feasible to place a one-year hold on a deposit? Of course not.

We want to help our customers--that is our business, but we must understand that most customers presenting a cashier's check is presenting a valid item. An item that they probably went out of their way to get, just so they would not have any problems with the availability of funds.

Why don't we just call and verify each item? Banks are not always open when you accept a deposit and even if they are open..have you ever tried to confirm a cashier's check issued by a large bank? I tried the other day and it took all day.

Believe me, we all want a better solution for verifying funds. Our bank lost over $250,000 last year in Nigerian fraud type scams. And if the smaller community banks keep losing this type money ( and that is a lot of money for a community bank!), we will ultimately all pay the price.

>>Would you accept a $10 charge for depositing a Casier's Check? >>

Yes, if that fee assured me that the check was going to be verified as good before the funds were released, then I would. And I know hundreds of others who would agree with this too.

>>The best thing is to get a national news story about this scam with a warning to people that they need to confirm if a Cashier's Check is really authentic before accepting it on face value.>>

We have been on The Evening News with Dan Rathers, two local news shows, two newspaper articles and in Wired magazine. We have another article due to come out in Minnesota Law and Politics next month. All of this media has helped, but what about the people who do not see or read about the scam? If we had the banks working with us to fight this then we could protect all customers, not just the ones that were sitting at home on November 1, 2002 and saw the Dan Rather's news report.

Shawn

One choice you have to insure an item is collectible, is to send the item for collection instead of depositing it and allowing it to pass through the forward collection system. Most customers become very upset if we suggest this method, however, because they do not want to pay the $10 collection item fee.

>>Because there is no way we can know for sure when a check will clear>>

Then tell us that! If my bank would have said, "We have no way of right now how long it will take for the check to clear, some take a few days and some longer. To be sure the check is good you should contact the issuing bank" that would have been enough for me.

Again, I work retail, and we always get people saying "When will you get more of this item in?" We have no way of knowing exactly what items we are getting in each and every day until we unpack the entire truck and open all the boxes . . . but we tell the customer that! That way the customer does not come back in 3 days only to find that we still do not have the item they want in stock. I guess I just don't see how the check clearance issue is any different . . . I wanted an answer from my bank so I could make an informed decision, and they let me down by not giving me the info I needed.

Shawn

>>One choice you have to insure an item is collectible, is to send the item for collection instead of depositing it and allowing it to pass through the forward collection system. Most customers become very upset if we suggest this method, however, because they do not want to pay the $10 collection item fee. >>

I had no idea that this was even an option. I wish my bank had told me this because I would have paid $10 to ensure my safety. That is a very small price to pay to avoid this nightmare.

Why don't banks inform their customers about this option?

Shawn

Shawn,
I agree that the only greedy party to your transaction was the person that ripped you off. And I'm glad you recognize that not all banks handle these situations the way your bank did.

For example, our bank provides a quarterly newsletter to all of our customers that crosses all bank functions- including security. We have found this to be a great vehicle for alerting our customers to new scams, or even to new twists on old scams. I know that it's only one small step, as we are only one bank. But I feel that we are doing what we can to be a part of the solution.

On Friday Jan. 31-03, my security officer came to me with a cashiers check for 8700.00 originated in San Antonio, Texas, payable through a bank in Ohio, returned as counterfeit. The scam was via our customers selling a tractor over the innernet to the other 'customer'. Our customer will have to make it good. Then later in the afternoon, he came with what looked like a good check from an Insurance Company payable through a bank in Canada for $19780.00. The tipoff - the customer told us they had won 25 million in the German lottery. The person contacting them wanted them to send money to get it, but they said no -to take the fees out of the first check; they were to keep 2 thousand, and then send money back or allow for an auto withdrawal. Our customer refused, but has the check. We put an exception hold, and aren't allowing any money to go out until we're sure it's ok. The big question - on the first counterfeit check - neither of the banks (the bank or the payable through bank) are not listed on your alert or in the section below. How can we get the word out to other bankers? We know this check is no good and looked very legimitate. - The second question - relating to the second check (and first) is there any EASY link to find bank routing numbers and/or telephone numbers a person could call and verify the authenticity of a document?

The easiest way to match a bank routing number to a name is to search the routing number on Google. When verifying funds on a suspect check, make sure you look up the number independently of the item. NEVER assume the phone number on the face of the item is the right one.

In reply to:

---

Then tell us that! If my bank would have said, "We have no way of right now how long it will take for the check to clear, some take a few days and some longer. To be sure the check is good you should contact the issuing bank" that would have been enough for me.

---

Sean - it is unfortunate but you must have been caught in the leading edge (aka "bleeding" edge) of this type of scam. More than likely, your bank had not experienced counterfeit cashier's check, and the teller was probably unaware of the scam.

The reason a Cashier's Check exists is that it is supposed to be "as good as cash." Once issued, a valid Cashier's Check cannot be stopped or returned NSF. That is why Regulation CC puts such strict rules on a bank's ability to place a hold on funds from a deposited Cashier's Check.

So when a customer asks "when will the check be good", the assumed answer is that a Cashier's Check is good right away.

The word is spreading as one of our tellers caught a forgery that a customer was attempting to deposit. What tipped her off was the customer's request to get cash-back right away. However, if we had to stop and verify each and every Cashier's Check, Money Order, etc. that gets deposited, the already long lines in our lobbys will get absurdly long.

Unfortunately, the banking industry does not turn on a dime. The word of this scam is spreading, and there are probably vendors designing lobby signs and notices to alert customers to this scam. Keep in mind that there are countless scams out there that can affect a banking customer, and if we had a notice to warn customers on each and every one of them, it would be almost as long as the lobby line.

The KEY for people to ask at a bank is - "How do I know if this Cashier's Check is legitimate?" Many tellers work part time, and most get paid little more than minimum wage. Turnover among the teller workforce is high. The average teller will not be able to anticipate every type of dangerous situation you might be facing.

BTW - If you received the counterfeit check in the mail, did you contact the Postal Inspector? U.S. Postal Inspectors

Bonnie, you are correct, the public requires
education in this matter. No matter how many local
seminars I can manage, I think it's worthy cause
for 20/20, et al!

Shawn, first let me say that I am sorry that you were scammed; however, you were taken advantage of by some despicable individuals, not your bank. I have spoken with several people who were victims of this type of scam, and while I feel bad for them, I know that there was little that we could have done to prevent what happened. For one thing, in each situation, the individuals did not give us all of the details about the transaction they were conducting. Some of them were different from your situation, but it seemed that the person who sent them the checks had "warned" them that this transaction was highly confidential, not to share too many details.

If you had a concern, I feel that had you communicated the details of the transaction to a bank employee, a lawyer, or law enforcement this could have been prevented. I applaud your efforts to get the word out to the public about this scam, but I think your anger and cries for reform in the banking industry are misplaced. There was a time prior to Regulation CC when banks could hold checks for virtually however long they wanted. Can you imagine a bank placing a hold on your paycheck for 3 weeks until they were sure it cleared? Regulation CC came about to expedite funds availability for deposited items, the trade off is that sometimes we cannot hold items for as long as it takes them to clear.

Finally, no matter what, your signature on the back of that cashiers check is your guarantee to the bank that you are responsible for that item if it is returned for whatever reason. Your bank has the obligation to identify you as the payee of the check, aside from that, we have no binding legal connection to the drawer or sender or the item. Your bank was dealing with you, a trusted customer, and did not know that the Nigerian con artist was involved. Basically, when you sign the back of a check, you become responsible for it and while most people will say that they did not know this, it does not excuse them from that responsibility.

Again, I am sorry that you were taken advantage of, but the focus of your efforts is better spent trying to inform others, not trying to point fingers at the banking industry. Unfortunately, everyone but the Nigerians lost in this situation, you have suffered a monetary loss, and your bank has lost a valed customer.

Bonnie,

>>The KEY for people to ask at a bank is - "How do I know if this Cashier's Check is legitimate?">>

I guess our mistake was that we thought to know that the check was legit all we would have to do is ask our bank how long for it to clear . . . if it does not clear it is not legit.

>> Many tellers work part time, and most get paid little more than minimum wage. Turnover among the teller workforce is high. The average teller will not be able to anticipate every type of dangerous situation you might be facing.>>

So is it the customer's fault that the bank is not fully training the tellers on how to handle situations like this? I have brought up the fact that I have worked retail already, and every business that I worked for if an employees told a customer something, weather that was a part timer who just started or a full timer who had been their for years, we stood by it. The customer is going off of the information that they are given by the employee . . . are we supposed to ask each employee "How long have you been here and are you fully aware of all of the rules and guidelines?" before we work with someone? That is the banks job to make sure that the employees are doing their job.

>>BTW - If you received the counterfeit check in the mail, did you contact the Postal Inspector? U.S. Postal Inspectors >>
It was sent FedEx

Shawn

>>For one thing, in each situation, the individuals did not give us all of the details about the transaction they were conducting.>>

In my case I told the teller that this check is from someone I do not know for the sale of a car over the internet and I want to make sure I know when it is good cleared money that I can spend without having to worry about it ever coming back and biting me in the butt. I don't think I could have been any more clear than that.

>>you were taken advantage of by some despicable individuals, not your bank.>>

I feel like I was taken by both of them. I know that the real "bad guys" are in Nigeria, but the part that gets me is that this scam works because the scammers know that a bank will say that funds are available within 24 hours, but it will take much longer for the check to clear. How do we make sure the average banking customer understand that too?

You people are in the banks . . . what can we do to warn the customers? Is there a way to do it with out changing laws?

Shawn

In reply to:

---

So is it the customer's fault that the bank is not fully training the tellers on how to handle situations like this?

---

I am not excusing a bank that has a poorly trained teller, however, a teller is not in a position to know everything that could potentially affect you. By asking if it was "good cleared money" the teller's response will be "A Cashier's Check is considered good funds." The teller does not know that the check is counterfeit at that time. As I said, at the time that it happened, the bank was probably unaware of the scam.

I would draw a very loose analogy to that of a customer that asks the store clerk "Will the colors run on this blouse?" The store clerk responds that the colors shouldn't run. The customer is later upset when upon removing the ruined garment from the laundry, discovers that item was "Dry clean only." The colors wouldn't have run if the blouse had been dry cleaned. You were asking one thing, but the teller understood the terminology as something different and responded according to how she understood your question.

Compliance with Reg CC is something that examiners love to drive home as it can be an easy "gotcha" during an exam. Bankers get gunshy about having "obvious repeat violations" and we drill into front line staff that you CANNOT HOLD a Cashier's Check. That's federal law. Part of an amount of a large cashier's check can be held, but you should hear the howls of protest when we do!!! When you have an impatient customer with a long line of impatient customers behind him or her, the safest way to not violate federal law is to not place a hold on any portion of the check. If you want to see how difficult Regulation CC can be, please check out some of the resources on this website that deal with Reg CC.

However, I still need to get back to the point that news of this scam IS spreading, and many banks are telling front line staff to be cautious of these kinds of transactions.

I will try to be as cordial as possible, but in essence Shawn got taken, he’s mad and he’s blaming the bank. He’s got to blame someone and the bank is the easiest and the closest.

If he works in retail, and from his comments he must be in some sort of management or supervisory position. If that’s the case (but maybe not) he should have some knowledge of the difference between cleared funds and available funds and how long it takes a check to clear. After all, most retail stores will not give you a refund, other than a store credit, for 10 days if you write them a check and then return the item.

He must have had some suspicion of the check because of the questions he asked the teller, but I also think he got the answer he was looking for, and as others have said a cashier’s check is suppose to be as good as cash, the teller answered the question correctly based on the regs and the item presented to her/him.

By the way, if his store had been paid with one of these cashier checks under the same circumstance where the person using the cashier check was not aware it was counterfit, and it got returned, I bet the store would be going after the person to recover the money. So was it the store’s fault this person got taken because they didn’t verify the funds properly? I don’t think so. This may not be a good analogy, but the point is that neither the store nor the customer was at fault, but the store wants their money from the person endorsing and spending the check because, as another poster said, once they endorsed the check they became responsible for it. The same applies in Shawn’s situation; once he endorsed the check he became responsible for it.

Shawn, I’m sorry you got taken in this scam, but it is not your bank’s fault.

That’s all I have to say about that.

>>I would draw a very loose analogy to that of a customer that asks the store clerk "Will the colors run on this blouse?" The store clerk responds that the colors shouldn't run. The customer is later upset when upon removing the ruined garment from the laundry, discovers that item was "Dry clean only." The colors wouldn't have run if the blouse had been dry cleaned. You were asking one thing, but the teller understood the terminology as something different and responded according to how she understood your question.>>

And in every retail store that I have worked in we would have said to that customer when they came back with the blouse that we will give them a new one, and we are very sorry for the problem. Then we would look at the register ID info to see who was the cashier that helped her and train that cashier to always check the tag before the give the customer any garment care instructions, and if it is still not clear to them, call a manager.

We would always take a problem situation as a learning experience so that it would not happen again to other customers . . . I guess I feel like a large number of banks are not learning from this, and actually looking to see what they can do to help protect their customers.

>>you CANNOT HOLD a Cashier's Check. That's federal law. Part of an amount of a large cashier's check can be held, but you should hear the howls of protest when we do!!! >>

And that is why I suggested the release form. If a customer wants the money now because they know the check is from their brother and it is good, then they sign a release saying that they are aware that this check has not yet been "cleared", so the bank is in no way liable for anything that happens with the check or the money. But if the person does not know the sender of the check very well, this may make them rethink and wait for the check to clear.

It would be like signing out of a hospital against medical advise . . . if you sign the papers and go you cannot sue the doctor later because you went against their advise. It was your choice after you had been told all of the facts.

>>many banks are telling front line staff to be cautious of these kinds of transactions.>>

That is good . . . I guess I just want to know what I can do to help and spread the word faster. I hate it when I open my email and there are 10 more emails from new victims, and this is daily. I want to be getting more emails that say they heard in time to save them or that their bank caught it in time.

Shawn

>>The best ways to inform consumers about the threat of counterfeit checks, which have been popular not only with Internet auto sales, but also with Internet employment search sites, are the channels we are usign now. Your web site and media appearances, the newsletter I mentioned earlier, this forum, and other media that people actually pay attention to.>>

I know that all of the things you mentioned are helping, but I am just thinking about all of the banking customers who may not see my message in time. If every bank would take measures to also inform thier customers about this scam, as I am trying to do, their would be a lot less victims.

>>The downside is that just as Nigerian fraud has shifted from advance fee to counterfeit checks, it will shift again to something new when enough people are on to the scam. >>

I know, I have thought of that too. But let's try to stop one before we start to worry about the next one.

Shawn

At one time, somebody wanted a law that said banks must make funds from cashier’s checks available on a next day basis. They got it. Now, some people appear want a law that says banks should warn people about cashier’s checks. They may get what they want too. Banks will comply with that requirement as well.

It’s unfortunate when anyone gets stuck with a bad check. However, the fact that it’s a cashier’s check does not enhance the loss. Most checks are paid on presentment. However, an even higher percentage of cashier’s checks are paid on presentment. If consumers are entitled to a warning that a deposited check may not be paid, giving it on cashier’s checks alone is ridiculous. If there is some naturally occurring responsibility on the part of banks to explain the ramifications of an endorsement to their clientele, it applies to all checks, not just cashiers checks.

I am sympathetic to anyone who gets stuck with a bad check, but cannot follow the logic that it’s the bank’s fault that one person issued a fraudulent item and that another person accepted it.

Shawn-First, I will reiterate the feelings expressed by others on the board discussion; I am sorry you were the victim of a scam. I doubt I can clarify the position of most banks any better than the guidance and opinions already offered (by some very intelligent and notable persons in the national compliance arena), but I'll offer by $.02.

You mention that you want to hear more about the times the bank has saved a customer from being scammed. Don't hold your breath, because it is not going to happen. Banks identify potential risks every day and rarely receive as much as a passing "thank you". People love to share the horror stories, but they rarely share the victories.

Banks regularly identify potential elderly abuse (ranging from the greedy relative to the thieving roofer or caretaker), counterfeit checks and cash, altered checks, and the list could go on and on. Sometimes we are thanked by our customer and sometimes we are sued. We then get to spend thousands in court explaining to the judge why we declined a transaction or closed an account.

I can't say specifically what I would have done in your situation, because I haven't been there. But I think I would have taken the initiative to verify the item myself with the paying bank rather than relying on a teller to tell me when a check presented against another bank would "clear". The answer you received was basically correct--IF it had been legitimate. Unfortunately, it was not. Every question would have multiple answers if you factor in all of the "what if" scenarios.

You asked me earlier why we don't tell our customers about the collection service. Do you have any idea how many services most "full service" banks offer? It would require volumes to disclose every service offered by most banks. And the bottom line is...most consumers don't want to hear about that list. If they need a service, they will ask us for it. We have to be reasonable in our disclosures and expectations. Your bank is a depository institution. They clear your paper items for you (at a very reasonable cost I venture to guess), pay you interest if you want it, send you account statements, provide you with electronic access to your funds, work with you to resolve errors in electronic processing, and provide a host of other services. They have no crystal ball to tell them which items will ultimately be paid and which ones will not. Each depositor should know the source of the items they present for payment and take responsibility for those items through final collection. The banking system simply can't work any other way.

Although banking is a business, I would guess that it is indeed not like most other retail businesses. Speaking as a community banker, we work hard to provide good service to our customers because most of them are not just customers--they are our friends. We go to church with them and we sit at the baseball park with them. We laugh with them when they have new grandbabies and we cry with them when they lose someone they love. And we take it very personally when they are victims of any crime. So please don't try to make this a "bank against the customer" crime. We are all on the same side--the good guys against the bad guys.

Brenda, that was beautiful.

Shawn, just another point, do you realize how very impractical the "release form" idea is?
What about merchant accounts? Is a teller going to fill out a form for
their deposits because, let's say, in the merchant's deposit of
1400 checks that 5% of those checks may not be good, therefore, they should
have 70 release forms prepared? I don't know how your bank runs, but if we had to use
a teller's time that way, I think our remaining customers would
pretty annoyed having to wait longer than the usual 2-3 minutes to be assisted.

I understand that you were "taken" and I am sorry that you were a victim,
owever, the government had set up
the Expedited Funds Availability Act because consumers were complaining
that they did not have use of their funds quickly enough. So in response to
the demands of consumers, the banks were forced to comply.

Maybe you should write your Congressman and have it repealed.