International Bank Fraud

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Ragorn
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International Bank Fraud

Postby Ragorn » Thu Jul 25, 2002 11:50 pm

So my Thursdays aren't as exciting as some peoples'. Didn't do Muspel, didn't get a god quest, not looking forward to Friday Night Newbiekilling Fest.

However, I am involved in a case of international bank fraud which is pretty cool too. We posted my Camry on autotrader.com (1992 XLE, good shape, you should buy it). We got a response from a guy who said he lived in Africa and wanted to buy the car off us. He said he'd pay for shipping the car overseas, and offered me $3700 sight unseen. "Uh sure" I said, and gave him my address.

Today a cashier's check arrived at my house. The check was in my name for $8500. I was really suspicious, but cashier's checks are supposed to be as good as cash, from what I've heard. So we figured we'd cash the check. If the check bounced for some reason, at least we had the cash and the responsibility was on the bank and not us. We took it to the bank and they didn't have enough cash for us (which made me feel really cool), and the second bank said they wouldn't cash it because they couldn't contact the issuing authority (Bank One). We deposited the money into my account. They told me the money would be available tomorrow at midnight, but they wouldn't actually verify the check until next Thursday. I asked about fraud protection, and the bank said that if the check didn't verify properly, then I would be responsible for the balance.

So I email the guy and tell him he can come get the car in a week when the check clears. He writes back "I sent you the wrong amount, I need you to Western Union me the balance by Monday because I'm involved in an urgent business deal." He gave me a name and address in Nigeria to wire the money to. So here's the scam.

1) Money is available in my account tomorrow.
2) I wire off $5000 to this guy out of the money from the check, which happens instantly.
3) The check comes back forged, the bank says I'm responsible for the balance.
4) I'm out $5000, and I cry like Gormal at a Julia Roberts movie.

The cashier's check looked legitimate. It had the watermark and all the correct coloring. The major tipoff was the fact that it wouldn't scan at the bank. It was also issued from the account of a communications company and not this random guy. According to the Interweb (which is never wrong), this scam is several years old and has lots of variations.

Two things came out of this:

1) Cashier's checks aren't as foolproof as they used to be. If anyone ever settles an internet business deal with a cashier's check, make sure it clears before you deliver the goods. At the very least, call the issuing bank with the check number and make sure it's legitimate. Get the phone number for the bank from the phone book or internet, some scams print a fake phone # on the check itself, where they have a guy whose job it is to tell you that the check is real.
2) For five glorious days from tomorrow at midnight until next Thursday, according to Bank of America I will have close to ten thousand dollars.

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- Ragorn
Jenera says 'i managed to match a little, ragorn's outfit is hideous.'
Jegzed
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Postby Jegzed » Fri Jul 26, 2002 12:07 am

Nigerian business letters are a very common fraud.

So it seems they trying to expand it now Image

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/Jegzed - Sorcere Master - Crimson Coalition
Vahok
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Postby Vahok » Fri Jul 26, 2002 1:17 am

Ragorn

A couple things are wrong with some of your thinking or what you were told. Just so you know, if you did cash the check, you still are responable for the whole amount. Banks wouldn't cash the check without an account (which would need to be in good standing).

Also, the bank does have enough money (is something banks tell you), and banks prefer to have notice for large cash withdrawals/check cashing. And, naturally, banks don't like to cash large checks because of frauds, customer impersonations, etc.

Last, cashier checks are among the most frauded items (everyone thinks they are as good as cash), especially ones from out of state, country, etc.

But your warning is valid, if I received a large check for something, I'd ask for a hold to be put on the amount. Time for the check to clear isn't gonna kill ya but the check being shit will.

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Ragorn
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Postby Ragorn » Fri Jul 26, 2002 1:52 am

<BLOCKQUOTE><font size="1" face="Verdana, Arial">quote:</font><HR><font face="Verdana, Arial" size="2">Originally posted by Vahok:
A couple things are wrong with some of your thinking or what you were told. Just so you know, if you did cash the check, you still are responable for the whole amount. Banks wouldn't cash the check without an account (which would need to be in good standing).</font><HR></BLOCKQUOTE>

I'm not really sure on this part. Cashing the check required the signature of the manager, and from what I gathered from her conversation with the teller, that signature implies responsibility. Emily believes that the responsibility is the bank's after we cash the check, because it's their job to verify incoming funds. Plus, it can't be proven that the customer knew his check was illegitimate, so I imagine fault can't be placed on the customer in all cases. But that's just my conjecture, if you actually know for a fact that I'd be responsible, I'd believe you.

The first bank we went to may or may not have had the actual cash, the manager explained rather embarassedly that they had someone come in and cash out $7000 just an hour before. She said she could make the amount in $20 bills, but they wouldn't have 85 $100s in the building until tomorrow morning. It was our choice to decline because we didn't want to have to buy a suitcase for all those 20 dollar bills Image

<font face="Verdana, Arial" size="2">Last, cashier checks are among the most frauded items (everyone thinks they are as good as cash), especially ones from out of state, country, etc.</font>


Dead right on that one. There are warnings all over the internet about frauded cashier's checks, and as scanning and printing technology gets better, the problem will only get worse.

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- Ragorn
Jenera says 'i managed to match a little, ragorn's outfit is hideous.'
rylan
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Postby rylan » Fri Jul 26, 2002 2:39 am

ugh.. that sucks Image

And yeah, I've seen a lot of scam letters and emails coming out of Nigeria. Apparently there are a bunch of notices about scams and crap like this, and investigations going on, but since its international it seems nothing gets resolved Image
Guest

Postby Guest » Fri Jul 26, 2002 3:27 am

<BLOCKQUOTE><font size="1" face="Verdana, Arial">quote:</font><HR><font face="Verdana, Arial" size="2">Originally posted by Vahok:
<B>Ragorn

A couple things are wrong with some of your thinking or what you were told. Just so you know, if you did cash the check, you still are responable for the whole amount. Banks wouldn't cash the check without an account (which would need to be in good standing).

Also, the bank does have enough money (is something banks tell you), and banks prefer to have notice for large cash withdrawals/check cashing. And, naturally, banks don't like to cash large checks because of frauds, customer impersonations, etc.

Last, cashier checks are among the most frauded items (everyone thinks they are as good as cash), especially ones from out of state, country, etc.

But your warning is valid, if I received a large check for something, I'd ask for a hold to be put on the amount. Time for the check to clear isn't gonna kill ya but the check being shit will.

</B></font><HR></BLOCKQUOTE>

He didn't cash the check, he deposited it, which is the difference. He won't be responsible for the fact that it's not a good check, unless he actually takes the money out of his account.
Tesil2
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Postby Tesil2 » Fri Jul 26, 2002 3:38 am

<BLOCKQUOTE><font size="1" face="Verdana, Arial">quote:</font><HR><font face="Verdana, Arial" size="2">Originally posted by Iyachtu:
He didn't [b]cash the check, he deposited it, which is the difference. He won't be responsible for the fact that it's not a good check, unless he actually takes the money out of his account.

[/B]</font><HR></BLOCKQUOTE>

He sent 5k to the guy, so he IS responsible.....he is out 5k....hard lesson to learn I guess.

Sorry to hear this Ragorn.....
Ragorn
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Postby Ragorn » Fri Jul 26, 2002 4:31 am

I did no such thing. He -wanted- me to send him 5k, but I'm not that dumb Image Sorry if I didn't make that clear.

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- Ragorn
Jenera says 'i managed to match a little, ragorn's outfit is hideous.'
Tesil2
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Postby Tesil2 » Fri Jul 26, 2002 4:54 am

<BLOCKQUOTE><font size="1" face="Verdana, Arial">quote:</font><HR><font face="Verdana, Arial" size="2">Originally posted by Ragorn:
<B>I did no such thing. He -wanted- me to send him 5k, but I'm not that dumb Image Sorry if I didn't make that clear.

</B></font><HR></BLOCKQUOTE>

Heheh...sorry..really tired..thought you DID send it, didn't read it too well! Image
Vahok
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Postby Vahok » Sat Jul 27, 2002 1:42 am

<BLOCKQUOTE><font size="1" face="Verdana, Arial">quote:</font><HR><font face="Verdana, Arial" size="2">Originally posted by Iyachtu:
He didn't [b]cash the check, he deposited it, which is the difference. He won't be responsible for the fact that it's not a good check, unless he actually takes the money out of his account.

[/B]</font><HR></BLOCKQUOTE>

Yes, he would. "Cashing cheques" these days is in realitly deposting and withdrawing the same amount. NO bank will cash a check without an account. Because if a bank would cash a check without an account, tell me which one and I'd be able to defraud the hell outta them. Ensuring a bank has an account (in good standing mind you) is to put tracing and accountablity to someone. Everyone has to remember, banks are a business and they aren't willing to lose their money. Cashing a cheque for anyone of the street is pretty stupid if ya think about it...

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Vahok
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Postby Vahok » Sat Jul 27, 2002 1:52 am

Also Iyachtu is correct...the depositor isn't responsible for the cheque being garbage but the fact that naturally the depositor's account will be messed up (ie. overdrawn because of withdrawal and cheque gets returned, or bank card will be captured) is the depositor's fault. I guess fault is the wrong term, problem is a better one. Bottom line, a depositor has be aware of the source of a deposit, basically will save them bullshit in the long run. Trust me, I've seen accounts which frauds have occured and holding the funds on cheques until they have cleared would have saved these people a ton o' problems.

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[This message has been edited by Vahok (edited 07-27-2002).]
nubug
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Postby nubug » Sat Jul 27, 2002 5:22 am

you can cash a check without a bank account. if your check is from b of a, go to b of a show them your id and they will give you cash, because its their check they can check it right away.
Ragorn
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Postby Ragorn » Sat Jul 27, 2002 10:28 am

That's true. However, this check (and I'd venture to say most other checks involved in scams) was issued by a bank that doesn't operate in my state.

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- Ragorn
Jenera says 'i managed to match a little, ragorn's outfit is hideous.'
Vahok
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Postby Vahok » Sat Jul 27, 2002 1:13 pm

<BLOCKQUOTE><font size="1" face="Verdana, Arial">quote:</font><HR><font face="Verdana, Arial" size="2">Originally posted by nubug:
you can cash a check without a bank account. if your check is from b of a, go to b of a show them your id and they will give you cash, because its their check they can check it right away.</font><HR></BLOCKQUOTE>

Yeah, that is kinda correct. It just depends on the amount. Even then, due to customer impersonations, banks will be careful to do it. Yes, they can verify signatures on the cheque, and verify money in the account, but sometimes it is difficult to verify the man/woman in front of you, and if stops or holds have been placed on the cheque.

My bank for instance will cash goverment cheques under $1000.00 for non-customers with proper ID. We are not supposed to cash cheques for non-customers for the reasons stated above (also, basically, the bank doesn't get anything by cashing your cheques, so why would they if you aren't their customer?)

However, like all rules on a job, there is flexablity. When I was a teller, and Bill was cashing a cheque his Mom wrote for $200.00, yes I would do it. As a gesture to Bill's Mom because she is a customer, and the fact that I ain't gonna get fired over $200.00 anyways (assuming something was wrong). Certifying cheques was the route I'd try to steer customers into, especially if it was a larger amount. One, I just have to make the cheque is good, I could care less who is holding it at the wicket. Two, insures that the person who was supposed to get the cheque actually does. But like all jobs, all banks are different, and have different procedures on how to protect their money/employees. But they all do have the procedures, so I'm not saying anyone is definately wrong, just trying to give the bank's point of view.

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[This message has been edited by Vahok (edited 07-27-2002).]
Corth
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Postby Corth » Sat Jul 27, 2002 5:13 pm

One of the major contributors of fraud is that the banks have to comply with certain deadlines to make payment on a check. The deadlines are contained in regulations and depend mostly upon the amount of the check and the distance between the payor bank and the payee bank. For a check that is in a small amount (I forget how much, a few hundred or less) issued by a local bank, Its something like 2 business days. If you think about it, given the sheer amount of paper going back and forth in the checking system, its not surprising that given these strict deadlines, people can defraud the system. Very often the bank which was presented with the check has to credit an account before the payor bank authorizes the payment.

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Zrax
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Postby Zrax » Sat Jul 27, 2002 5:57 pm

Man whew, when i read it I thought you sent him the 5k too. Good thing you didnt. Cool story, life has too many headaches.

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Postby Vahok » Sun Jul 28, 2002 12:40 am

<BLOCKQUOTE><font size="1" face="Verdana, Arial">quote:</font><HR><font face="Verdana, Arial" size="2">Originally posted by Corth:
<B>One of the major contributors of fraud is that the banks have to comply with certain deadlines to make payment on a check. The deadlines are contained in regulations and depend mostly upon the amount of the check and the distance between the payor bank and the payee bank. For a check that is in a small amount (I forget how much, a few hundred or less) issued by a local bank, Its something like 2 business days. If you think about it, given the sheer amount of paper going back and forth in the checking system, its not surprising that given these strict deadlines, people can defraud the system. Very often the bank which was presented with the check has to credit an account before the payor bank authorizes the payment.

</B></font><HR></BLOCKQUOTE>

You hit the nail on the head. Often as well, the account which the cheque is drawn on is debited before the other institution has cleared the money (basically two people don't have the money, kinda is "floating" between bank suspense accounts.

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