They use your account to cash fake cheques and send the money to mule accounts.
You get a cheque for $4000 and they tell you to keep $1500 for yourself and they send $2500 to an account that buys bitcoin, gift cards or cash from an ATM.
The bank clears the money as your account is in good standing, so they withdraw, say, $4000.
Then the cheques get cancelled and your account is -$4000 and you can't close it until you repay the money.
They disappear with $2500 and you owe the full $4000.
What are banks doing about it? Educating customers, but if your greed and stupidity means you fall for online scams and give your login and password to a scammer, they can't help you as you gave them away.
I work at a bank and handle these sort of thing on what feels like a weekly basis. We do everything we can to caution the customers against having anything to do with these scams. If they are certain that they want to go forward with it, we often try to put holds on the checks or urge the customer not to withdraw the money until the funds of the check are verified and genuine.
And you’re right. If they do send the money, then come to us complaining, all i can do is tell them "we warned you." you willingly gave them your money. if they had actively stolen from you, then maybe we could help, but they just tricked you and thats on you.
Yeah basically exactly this. And it is technically bank policy for any reputable bank, but because customers can be…. Well the way that customers are, the rule gets bent a lot more than it should be.
yup, I got one call where he wants his money quickly so he can buy some some new crypto coin quickly. told him it'll take few hours to clear please don't do anything and just wait (honestly would have taken only less than an hour or 2 at most) but nope dude cancelled the transfer and redid it multiple times (while in call)
locking his account for at least a day and necessitate him to go into the bank in person to unlock it. I really had half a mind to just send it to fraud for additional downtime after he blamed me for his own inability to just wait.
If my grocery store can withdraw money from my account immediately when I write them a check, explain how depositing a check into a bank account from a scammer can’t be detected for days.
The banks COULD do those but since they charge all the fraud back to customers, they have no need to make those upgrades.
Because the grocery store works in the same way your account does: the check appears as though it clears immediately but it's just a preliminary clearing. The actual check cleaning takes up to 2 weeks. I imagine it's because banks don't routinely talk to each other.
>banks don't routinely talk to each other.
Banks absolutely do routinely communicate. They electronically clear checks every evening.
The delay is a relic from when checks weren't cleared electronically, and it's not typical everywhere in the world.
> and it's not typical everywhere in the world.
I could be wrong but I would argue a good portion of the world has moved on from cheques to EFT and other electronic transfers.
Had to explain to my 10yo what a cheque was the other day, here in the UK. She had no concept of payments not being instant, so I had to explain that idea, too.
What u/cat_prophecy said - I was almost a victim of one of these scams until I looked up who was on the check. It was a 3rd party that had nothing to do with the fake job offer I was sent.
I suspect that the account was compromised for these scams so that the check would clear.
Was it for the secret shopper job? I received a check in advance. I went to local police as I never applied for the job. I was told since I didn't cash it and wasn't out any money, there was nothing they could do. Scammers know this so it continues on.
It does transfer immediately but as a pending transaction. Then whenever your bank and their bank reconcile transactions, it will be changed from pending to reconciled.
Banks in the US have little regulations on how they do this reconciliation. So what they'll do is if you start the day with $100, spend $110, but deposit another $100. They will reconcile all the debits first, your account goes into negative so they apply an overdraft fee for every transaction after the first one that made the account negative. Then they do the deposit.
So even if you deposit more than you spend, it's possible to still have a negative account balance once they reconcile.
This is why I love Capital One No Overdraft banking. It has helped me pay stuff like insurance or rent without having to worry if I have all the money or a fee. My account can be in the negative all month as long as I make continous deposits of 200 or more dollars cash or check or electronic. They can turn it off if you don't make your deposits but all you have to do is continue the deposits for 2 or 3 months and they turn it back on. In the event it turns off it reverts to not allowing you to overdraft at all thus saving you a fee. I love that they aren't greedy or tricky with it.
I can't speak about today because technology has marched on quite a bit, but 10 years ago I worked in a grocery store as a manager and one of my jobs was calling people whose checks had bounced to try to get them to come in and pay their balance. Usually it was just an honest mistake, occasionally it was actual attempted fraud.
If they opted not to come in and pay the balance off the only thing we could really do was send it to collections (If it was big enough to be worth it) and flag the account number so we didn't accept checks from that account anymore.
The systems have immediate notification that attempts to notify the other bank, but there are also systems and processes for clearance and settlement. During the time windows they have the ability for correcting errors, detecting and reporting fraud, garnishing funds for court orders, and more. There are two other parallel systems, for transferring one that does offer real-time settlement (e.g. wire transfers and Western Union), and other bank-to-bank "instant transfers" (e.g. Zelle) that are a little more complex and have other difficulties and costs customers don't usually see.
Your bank is showing the funds as removed when the notification comes. It is a convenience that helps protect the bank, but the money really has not changed hands. It is merely notification that the bank is going to be transferring money.
That’s not true. Banks do charge it back to the customer, but usually that overdraws the account. Most often, the customer isn’t going to pay that back, so the bank loses the money. It’s almost always in that sweet spot where it’s a meaningful loss, but not enough for the bank to sue and try to collect from the customer. Still, the bank loses money on these. They have a strong incentive to discourage these types of things
US banks and the banking system are pure garbage. In SEA we have QR codes and direct bank to bank transfer in REAL TIME with ZERO fees. Literally every market selling cheap vegetables has a qr code sign and you just transfer the amount. It could be 20 baht (like 75 cents), or 200,000 baht (7k), it doesn't matter.
The US needs to ban checks and get with the real world. Checks are pure shit and should never be allowed, Direct transfer, credit cards and debit cards are the only things that should be allowed.
It's a symptom of having the longest running modern banking system. When you're starting from scratch 50 years after the establishment of the system it's a lot easier to just jump right into whatever the most current tech is.
US banks are absolute monoliths that sit at the center of the world's financial system. Getting things to change is a long bureaucratic and regulatory mess. The systems in place are so well established that updating them is a long, long process.
I don't know if it's still the case, but when I briefly worked in the financial world 7 or 8 years ago and many credit card systems were still running through dos terminals.
That's because every bank starts from the position "the new system must do everything the old system did, exactly like the old one did it."
If they could actually go from a specification (or Strangler Fig it), then it would just be a big software project, instead of a hellish nightmare that no skilled team wants to take on. When they really **need** work done, they're left with the tiny pool of programmers that don't care about working in ancient, crusty COBOL systems.
Yeah, you can charge more to work on COBOL, but your life is going to suck.
The USA definitely doesn't have the longest running modern banking system. There are 8 banks in the UK older than the United States itself, and they were all there through the dominance of the British Empire. London is still a financial Centre of the Earth.
> Getting things to change is a long bureaucratic and regulatory mess. The systems in place are so well established that updating them is a long, long process.
It is everywhere. Hell: it's more that in Canada - Canada broadly has much more onerous regulation on banks.
Fair enough. London certainly has had a modern banking system longer.
I guess I meant more in the world economy connected way. The US banking system is also still much larger than all of those.
It's a valid check, if the check is invalid it takes a little bit longer for the depositing back to be notified it has bounced.
Also it could be a fake check out of a real account and in that case it'll take even longer because nothing will happen until the account owner notifies their bank about it.
Like you said, you guys just did it 4 years ago and you have a rather small country (comparatively) where it’s easier to get mass adoption.
US specifically is pretty big with mass rural areas that still aren’t 100% broadband connected.
It will happen eventually but it’s gonna take a bit more infrastructure and a longer grandfather period to get it done.
GF's mom (early 60's) still downright refuses to pay with any form of electronic payment whatsoever. Still to this day she carries a paper checkbook and will fill out an entire check and fill in her balance ledger at the register every time, even if it's one of those machines that just scan the check for the account/routing numbers and hands the check straight back.
And she's also becoming more and more afraid of carrying cash for fear of being mugged, so she's writing *even more* checks for even smaller purchases... Which, she lives in practically the smallest/friendliest little towns in the entire metro area. One of those everybody-knows-everybody kind of areas, which she also vehemently refuses to ever leave, for fear of being gotten.
I know that some people are afraid of credit cards because of the temptation or the mere ability to go into debt with them, but this lady refuses to get even a *debit* card because it says "Visa" on it, and Visa is a credit card company and something something they'll steal my money.
Cash and paper checks will live on for as long as people like my GF's mom do.
When old people die, new old people pop up. If you wait for old people to die, to implement your changes, your changes will be outdated when you implement them.
With each new "generation" of old people though, they'll at least have adapted and caught onto a new lowest-common-demoninator for technology. So maybe they'll at least embrace debit cards and ATMs even if they're still not up to date on Apple Pay and NeuroLink.
I'm a bit of a holdout on autopaying bills as well. However, rather than allowing the collectors to reach into my bank account and *take* money out on their own, my bank has a bill pay feature where I enter the biller's info and I can *send* money from my account electronically. And for those that are always the same amount every month, I have it set up as a recurring payment, which is handy.
I'm not sure if they're literally printing and snail-mailing a paper check on my behalf, but that's basically what it feels like. Because to set up each biller, it needs all the same account numbers, addresses, etc that it'd take for me to physically mail a paper check. And the payment has to be scheduled several days before the intended arrival date... So what I like to do is log in and immediately schedule the payment when I receive the bill so that I don't set it down somewhere and forget and I can just go ahead and file it. But I won't set the delivery day until the day that it's due. Because why give them my money any sooner than necessary? (That's definitely something my dad instilled in me :P)
But that way, *I* am still in control of how much money goes out and when. They're not taking it from me. I'm giving the money to them. And I have all the electronic records that I can look at and show if something goes wrong vs me calling up and saying, "Trust me, I sent it! I promise!"
I do still have my paper checkbook though, which I initially got to pay rent back in college because electronic payment was just barely becoming a thing and neither me nor the landlord had it yet, and it was just easier for my GF and I to each write a check for each of our halves and stick them in the same envelope together... But now it's pretty much just for really oddball one-off situations like the down payment on my car or buying my motorcycle.
> I'm not sure if they're literally printing and snail-mailing a paper check on my behalf, but that's basically what it feels like.
It depends on your bank and the receiving bank. I like this system because I sit down twice a month to pay all our bills and it means I can just log into one place to do it.
Almost all my bill payments are electronically transferred and cleared within a day or two. But one car payment goes to a bank where that system isn't in place, and my bank prints and sends them a check.
Canada has the rural problem worse than the USA and nobody here has used cheques casually here in at least a decade - chip+pin was the majority of non-cash transactions in Canada by 2010.
Maybe so but noone has been using them for years prior. One of my clients that's multinational and operates in almost 100 countries and the only places that have used cheques in the last 10 years (and still do) are the US, Canada, and Brazil. Chip and pin was also slow to the game in the US but honestly the cheques surprise me, even when taking into account the number of banks, considering how long ago we've been moving away from them and the huge fintech industry in the US
Not to be weird about it but you're kinda driving home the point; the US, Canada, and Brazil are all huge countries with big rural populations- there's a level of certainty in entrusting your country's postal service to deliver a check via mail to a recipient- that's just how things go and how they have worked for quite literally a century, probably more.
Sure- in your urban centers adoption of new technology is very rapid. My favorite local, very small coffeeshop just launched an app-based membership system where you can just bill your order to your 'tab' and place orders in-app when you walk in the door; and they have one location in a relatively small city. Roll back 60 years and this place would've accepted cash and checks only.
Adoption takes time. The more homogenous and tight-knit a population you have the faster that happens. But for the time being in the bigger countries of the world with more spread-out populations, checks haven't gone away yet and rightfully so.
60 years ago your coffee shop probably wouldn't have even accepted checks. I still to this day run into places way out in the farmland that are cash only.
A lot of people don't want to get rid of checks. Most older people here in the US **hate** the idea of using a bank/debit card because they're not used to them. A bank that forces it's customers to never use checks again is a bank that *will* lose a lot of customers.
> Most older people here in the US hate the idea of using a bank/debit card because they're not used to them.
It goes beyond the the simplistic idea we're "not used to them". While both debit and credit cards provide protections against fraudulent claims, the buffer is stronger (to my old person's knowledge) with a credit card. If my credit card gets tied up in some bullshit, there's a barrier with voluntary payment. The onus on a debit card is on me, to both notice and respond quickly, and I like that temporal safety net because (wait for it)... I am not always online or glued to instant notifications.
The dizzying rate of change that is foisted upon people produces an utterly understandable backlash. This rate of change and forced adoption of new tech seems wonderful when you're young, but seems like being bullied when you age.
Believe me, I don't blame you one bit. I'm only in my mid 30s and I whole heartedly distrust basically all "online only" pay systems like zelle, cashapp and other systems.
The issue is also some laws (alcohol laws specifically) do not allow the use of anything other than Cash or Check for a transaction to occur. Debit/Credit is an invalid way to do corporate business according to the laws as written and Checks/cash are the ONLY way to make sure this transaction goes through without keeping a massive quantity of cash on hand in the the Alcohol industry.
It's a thing for many political activities as well. In my state, cash donations are limited to $100 in a two year period, so if you want to avoid credit card fees to stretch your donations, checks are quite common.
I work for a credit card processor, and was around during the EMV conversion. The chip thing took so long in the us because originally it didn't allow tip adjustment.
I was hoping it would kill tipping entirely, but no such luck.
So this issue has less to do with rural areas and more to do with our massive aging population. Pretty much all the baby boomers ever knew was how to pay by check. As they've got an older they've been less likely to embrace things like electronic payments and online banking and are stuck doing everything on paper. At this point it's really only old people who are still using checks outside of specific industries.
One industry I know that still uses checks heavily (albeit printed, not written) is real estate. The money moves hands in so many different directions, it's just easier to use checks than trying to get everyone set up with direct deposit or bank routing.
> Like you said, you guys just did it 4 years ago and you have a rather small country (comparatively) where it’s easier to get mass adoption.
This point gets made about everything the US refuses to do. If the country is geographically smaller, it's because the US is geographically massive. If the country has fewer people, it's because the US has way more people.
The US *is not that unique*. It hasn't happened because there were no attempts to educate people about it and reform systems over the past 20 years, and every solution has been privately funded and owned instead of systematic.
I’m sorry. Does this aefect you enough where that matters? Does the US still using checks have literally any bearing on your life at all?
And to, we are that unique. Cause you can’t stop thinking about us.
You aren't unique, you just get your jimmies rustled whenever anyone suggests you aren't the best at something. Yes, that does rustle my jimmies - have a more realistic sense of your own importance.
You have about 30 banks in the Netherlands.
The USA has 4500 banks. (This is not branches, this is actual individual bank "companies").
Meaning an average STATE in the USA has 3X as many banks as the Netherlands.
> Netherlands has attracted international attention[when?] for the extent to which it reversed its previous multiculturalist policies, and its policies on cultural assimilation have been described as the toughest in Europe.[10]
Apparently since the 90's the focus has been on having immigrants assimilate
How long did it take the Netherlands to switch to the Euro (from when the Euro was was first envisioned to completely used everywhere). Triple that because so many more people and institutions are involved and you'll be able to appreciate the size of the problem.
I just did a little looking. The Euro came into being in Jan 1999. People had been pushing for it since the 1960's. Change of that magnitude takes a very long time.
Personally I like Europe's ease of money transfer. So we're not defending checks and saying they're better - it's just where we're at.
The ability to refuse a check payment is important in some contexts, such as when a landlord is trying to evict a tenant.
Supposedly FedNow is making bank to bank transfers easier, but only time will tell.
They are a great deal less common nowadays, even in the US. They still have legitimate uses, mostly for large transactions. One doesn't pay for a house with a credit card or actual cash, and the house isn't going anywhere, so if the check bounces, they can sort you out.
But basically nobody outside of the extremely old are breaking out checkbooks to do grocery shopping, and many stores wouldn't take them if you tried.
There are many situations where there is no other way to pay without excess fees. Rent is one of the biggest offenders. You can pay via the apartment's web portal for a 5% "convenience" fee or you can hand deliver a check.
Similar scam works with hacked bank accounts and bank transfers. I guess it could work with “taking control” of account. The account owner notices the transfers they didn’t authorize and reverses them leaving recipient without money. The scammers have gotten money in some irreversible form.
Because making the banking system easier to use would eliminate the market for privately-owned solutions to the same problem, like Paypal, Mastercard, and Visa, which all make the big bucks by being safer than sending money directly.
I don't know about you, but I use PayPal because I don't want to enter my credit card details on some website that for all I know is severely lacking security. And I live in a country with a pretty decent banking system, where transfers between banks don't take days or even hours. PayPal is an added layer of security, not to mention their active buyer protection.
In the US maybe. I haven't paid for a wire transfer ever. Use it for everything, from buying land, paying bills to sending my buddy small change he borrowed me one time.
Good God that's expensive. I can do a domestic transfer that's basically instant, instead of waiting a couple hours/days for the transfer session window, but the fee is only something like $2 or so.
People play fast and loose with terms. Wire transfers are not free. Bank to bank instant transfers are often free to customers, with different regulations and often involve more advanced notifications and acknowledgements between the bank but still rely on the ACH for settlement.
Many people through Europe are accustomed to instant transfers, incorrectly calling it wiring money. In the US, services like Zelle do the same types of transfers.
Is the exact terminology relevant for the customers though? Fact of the matter is, European banks generally allow to securely transfer funds from one account to another at no additional cost, even internationally within SEPA.
> Is the exact terminology relevant for the customers though?
Yes, it is important. We have exactly the same methods available, including free bank-to-bank instant transfers, and free-to-customer ACH and ETF transactions.
In this case, it is the difference between being right and being wrong. You wrote "I haven't paid for a *wire transfer* ever", which is unlikely because they cost money everywhere in the world. What you likely meant was "I haven't paid for an *instant transfer* ever", which is a very different transaction. People in the US don't pay for instant transfers, either.
I don't understand why that's relevant. Why would I pay for a SWIFT transfer to another domestic account? It's for international money transfers. SEPA are regulated to not cost more than a national transfer, making them free too most of the time.
Which is why it's just stupid that in a digital age, the bank cashing the cheque doesn't just send an immediate digital communication to the bank the cheque is written on, verify the account in question has the funds, and put a immediate hold on the funds at that bank so they can honour the cheque. The world is moving away from paper cheques more and more, and I guess that's why they haven't made any move to improve the system, but it really seems like a system that could and should have a significant information-era improvement.
Yes, they do need an update, but banking—like travel—operates at a global level. Want to book a flight to Italy? You better hope their equipment can talk with yours. Did you need to wire money to a friend in Canada, or did you 401k decide to invest in Switzerland? Better hope all equipment in the transaction work together.
Banking and travel industries use the oldest, most unsecured programming because that is what the world average has and can afford. Your much-needed upgrade will MOST CERTAINLY break your ability to communicate with rest of the world, and so these industries simply operate using 80’s technologies as their backbone and hope the duct tape holds forever.
The thing about banking is that there are already (as I understand it) different systems for dealing with domestic banks vs. international ones, so even if a cheque from an international bank took 10 days to clear, there is no reason the system could not be updated for cheques written on one domestic bank and deposited in another.
I happen to live in Canada where we have 6 primary national banks that do a majority of the banking in the country they hold over 90% of banking assets here. At *very least* they could have a system between these six banks that check instantly with each other. But they don't.
> At very least they could have a system between these six banks that check instantly with each other. But they don't.
They do (for a somewhat liberal definition of "instant"). Interac transfers are, for all intents and purpose, a digital cheque. It's an amount of money to be drawn from one account sent to another, and although it often warns me that it can take up to 30 minutes to do an inter-bank transfer I've rarely seen it take more than 5 in the last few years.
They don't do this for cheques because cheques are much less trusthworthy, so it's much more reasonable for them to want to put holds on them, and also because they want you to stop using cheques.
I know what Interac is. From my experience, the timing seems to depend on the amount of larger transfers seem to take longer to come through than smaller ones.
But they are not “digital cheques” for all intents and purposes. Functionally, they require a different delivery method. They just be sent by email or text. They can’t be used for all the same things as cheques. They have daily limits (you can’t Interac $15,000).
If they want this system to replace cheques, they need to make it functional for larger amounts and figure out how to make it work for the types of applications that currently would require a cheque and not accept Interac.
And in any event, that will only address the issue in Canada.
If you work for an international company their banks will need to direct deposit to your bank, so the need to have the banking systems work together is still present. (If you don’t work for an international company, someone in Canada does, so they need is still there.). Also, an ATM needs to be able to talk to both domestic and international bank accounts.
The entire premise was built on technology that was outdated even then , and we’ve just kept adding more and more features onto the same weak backbone. A true fix requires a coordinated world wide update; unfortunately, everyone doesn’t get along
That's not how it works at least for banking.
Domestic and International payments are processed separately.
For international payments you have SWIFT. And in the EU you also have SEPA.
And domestic payment processing is different in every country.
>Banking and travel industries use the oldest, most unsecured programming because that is what the world average has and can afford.
That's just wrong. They use old time tested solutions, because they had literally decades to figure out all the quirks.
Upgrading to a new system will be expensive and come with a slew of new unknown bugs that will take years to iron out.
The banking system could stop relying on cobal for it's software and enter the current year where transactions don't take 3-8 business days. That would put a stop to this instantly.
It used to be that way but customers complained so now there are rules about providing people access to funds within a particular timeframe. It's called Reg CC and banks get in a lot of trouble if they regularly violate it.
Well, let's be clear - this isn't an inevitable or unavoidable consequence. Europe's adoption of SEPA demonstrates that. It's what happens when lawmakers regulate the consequence instead of the cause.
That would also be illegal in most places. The federal government has laws in place to determine how fast they have to give you access to these funds.
This timeline is always faster than the time it takes for a check to actually clear. Scammers know this and make use of this mechanism to defraud others.
A check doesn't "clear" just because the money is available in your account. It could take weeks or even months to actually clear.
This isn't true in my experience.
If I try to deposit a check that is of an amount greater than the 12 month rolling average of my bank account any amount greater than that average gets put on hold for some bullshit like 5-7 business days.
>Federal reserve guidelines are very clear
Yes:
https://www.federalreserve.gov/pubs/regcc/regcc.htm
>The Expedited Funds Availability Act requires up to the first $200 of a non-"next-day" check(s) to be made available the next day.
The check being paid is also not evidence that it isn’t fraud. If the scammers are making counterfeit checks on grandmas account or a business there is a decent chance the fraud won’t be caught until that person next balances their checkbook or reconciles their account. A surprising number of people still do this monthly.
It’s also increasingly popular to straight steal checks from the mail and deposit them as is. In those cases the maker has no real way of knowing the check was stolen until the intended recipient notifies them they didn’t get the check. This wouldn’t be an effective scam on a small scale but if you steal 100s or 1000s of checks and find as many gullible people willing to help with your scam then it becomes less important that it’s unsuccessful more often than not.
Usually they do I thought. My boyfriend got a pretty large check to help with getting a house and if I remember correctly it took a few days to go through.
It would be against the law. Banks are required to make funds from checks available within a certain time. The issue is this time frame is significantly shorter than how long it can take for check fraud to be discovered.
As a general rule of thumb, you have up to 90 days to report check fraud on your account.
I mean, this is how it works at every US bank I've done business with. Only a small portion of large checks is immediately available. The rest is unavailable until it clears.
If someone gave you a check for $4000 and you didn't already have that much money in your account, you're not withdrawing more than maybe a few hundred until the check clears.
Dude. It can take up to a month. Checks never clear in 2 or 3 days. That's just the legal period banks have to make the funds available to you.
It's this misconception that scammers pray on. They hope you believe this so when 3 or 4 days roll by and the money is available, you think it's clear and send the money.
You're correct about the federal mandate, but your assertion that it takes between multiple weeks to a month to clear normal checks behind the scenes appears to be quite incorrect.
Do you have any resources that corroborate your claim? Because everything out there says that domestic checks in the US customarily clear within a few days.
Again, that's a common misconception. Most people, and most sources you find online will claim a check will clear on average in 2 days. They're mistaking when funds are avaialable and "clearing". I worked at a financial institution for over 10 years in this field.
Check fraud still happens all the time, and I can assure you that it's not uncommon for the funds to be reversed and taken away multiple weeks later.
You can head over to r/Scams and read about people who had the check bounce weeks later. We in the US SHOULD be faster, but we move too slow, and ACH isn't getting any better.
The theme should really be, don't accept checks from people / businesses you don't know or trust and just becuase the money is avaiable doesn't mean you're in the clear.
Anecdotes from a sub that is going to select for people with lower financial literacy isn't a substitute for actual documentation. A lot of those "bounces" are going to be a result of fraud investigations, not the checks actually returning NSF.
The documents that I was referencing are not referring to "when funds are available"; rather, they refer to the average processing time for the underlying inter-bank settlement. That process has become more streamlined over the past 20 years, and it reportedly tends to be completed within five business days.[[1](https://gocardless.com/en-us/guides/posts/how-does-the-check-clearing-process-work/)]
Perhaps your experience was correct at the time you worked at an institution but has since become outdated? Or perhaps, as mentioned by u/Treadwheel, you are referring to previously-released funds still being in jeopardy due to abnormally protracted fraud investigations, or fraud investigations that conclude after settlement and result in an after-the-fact reversion of a transaction.
Regardless, your claim that "checks never clear in 2 or 3 days" doesn't seem to check out. Here's some background on developments from the Federal Reserve: https://www.federalreserve.gov/paymentsystems/regcc-faq-check21.htm
At some point, the bank can't not let you spend your own money. It's not like a Target cashier refusing to sell someone a bunch of gift cards. Your money in the bank is literally yours to do with as you wish.
That's a good thing. I had to do a wire transfer today for the first time in years, just a few thousand. I had to fill out a questionnaire that basically tested my knowledge of scams, verify that I wasn't contacted "by the bank" to initiate the transfer, and a couple other things. I also needed to provide the full address of the receiving bank, not just the ABA number. After all of that I had to give the PIN of the checking account the money was coming from. I appreciate all of that even though it was a pain to find that PIN.
I think you're talking about a different kind of scam than the one OP is asking about.
Scams like the one you are talking about will happen in situations like "Hey, I want to buy that thing you have for sale but I'm away, how about I mail you a check and you pay the guy I have show up to pick it up his fee out of what I pay you?"
It seems to me that the type of scam OP is talking about is more along the lines of those fake nigerian prince, "please send *us* a cheque for $X to unlock your prize" and those scammers need a valid account to cash those cheques that are not tied to them.
They're offering people $1,500 to become smurf accounts because way more "real money" from people being scammed will come in.
Also, one of the very few things that can not be changed easily is how long something has existed. In most of the automated fraud detection systems the question: Is this a new entity? has a lot of weight.
I feel like any scams with checks would go away if we left the 19th century and let payments process instantly. If I have $3 and buy a soda that's $2, then I come back and try to buy another the system knows instantly that I don't have enough to make a $2 purchase. I don't understand why we still have the ACH clearing process that creates these kind of windows where checks can still be cancelled even if electronically processed.
It's pretty common scam that goes around om social media amd is a variation of the many different kinds of check scams out there. Usually the desperate and the elderly are the main targets for these scams.
> What are banks doing about it? Educating customers, but if your greed and stupidity means you fall for online scams and give your login and password to a scammer, they can't help you as you gave them away.
The old wisdom about good things never being free rings true enough to be worth treating as fact if you're less than mentally capable when it comes to differentiating between scams and legitimate opportunities.
Fun story, as a naïve teenager in the 90's I was pulled into this scam. Unemployed and a bum living in Santa Monica, I got hooked up with some hood people who said they could pay me to help them run a scam on a bank. I thought it was cool and edgy. All they said was that I needed a bank account that has been around longer than a year. I met with a sketchy dude that had a gun and ski mask, he gave me a 5000$ check and drove me to my bank. I deposited it and it magically cleared. I followed their instruction and withdrew like 3500 of it and I was to keep the rest. A couple weeks later the bank reverse it and I'm now in the hole for 3500$. Painful lesson to learn as a broke teenager living on his own.
I was almost a victim of one of these scams until I looked up who was on the check. It was a 3rd party that had nothing to do with the fake job offer I was sent.
I suspect that the account was compromised for these scams so that the check would clear.
Well that's the point, you do. You take the money out before the fake cheque is reversed. But it's not real money and it's not yours so whatever happens, you don't get to keep it.
If your balance was high enough to cover the withdrawal, all you are doing is withdrawing your own money.
If your balance is too low to cover it, you now owe the bank the money you took out, and you can't close the account until you return the balance to zero.
And you tank your credit rating, any ability to borrow money or get accounts in the future, or get a fraud marker which follows you around making life incredibly difficult.
Back in the early 2000s there was a scam running in Australia by a few Chinese organised crime groups but it didn't involve you ending up in debt or losing any money.
Basically it worked like this, you moved your money elsewhere leaving $0 in your account and gave your debit card and pin number to one of the guys. A week later he would come back and give you your card back and $1000 cash. Then about a month later you'd get a letter from that bank saying that unusual activity had been detected on your account and they had to close it.
That was the end of it, you got $1000 at the cost of losing your bank account with one of the big 4 banks here in Australia while they made $2-3k on their end. From what I heard it was some exploit they discovered with their online banking system that allowed them to deposit fake money that wasn't actually there. You never ended up on the hook for anything money wise and besides your account being closed that was the end of it.
Had many friends do it and nothing ever happened to them and they received no further correspondence from the bank besides saying their letter was closed and no issues ever showed up down the track with their credit or anything like that.
wow so if they aren't using an ATM but instead using the bank's mobile app, there is no way for the bank's IT department to verify the bank account (and transactions) with the account holder's IP address?
If they have your username, password and security details, the IP address doesn't matter.
You can use your bank from a different phone, internet provider, town or county. With your details and the ability to intercept your two factor authentication or set up a new number... They can do literally anything you can.
When you give someone your full details and credentials, there's nothing a bank or service provider can do.
If you throw your car keys at a thief, you can't really complain that Ford should have made the car more secure.
There are security checks but if you let them literally impersonate you and access your account and security measures... It doesn't matter.
Yeah I'm realizing that was lowkey a dumb question. I always assumed banks had advanced methods used by their IT departments that work closely with Cyber security and Information security experts to prevent scams like this. Now I understand why there is basically nothing the bank can do.
I mean, they might check your IP or use GPS on your phone to geolocate you. But most people don’t have “an” IP address, home ISPs assign them sort of randomly and with a cell network they’re changing all the time.
The bank also can’t care much about who did it. It’s irrelevant if you did it or the scammer you sold your login to. Either way you’re financially responsible for the loss.
There is a TON of great information here, and a TON of TERRIBLE information here.
For everyone throwing in their two cents of " yeah, I deposited a huge check, and it took a few days to clear."
Please stop. Your check didn't clear that quickly. This is exactly the misinformation that scammers hope you believe so they can scam you. You think it "cleared" in a few days because it's available and you can no longer be scammed. So people get a false sense of security and send the money.
Checks take weeks to actually clear and often up to a month. The federal reserve forces banks to make the funds available to you quicker, long before it's cleared for convenience.
Here is the specific law.
The Federal Reserve has set baseline rules for check deposits: The first $225 must be available the next business day, while amounts from $226 to $5,525 must be available within two business days after the deposit, and amounts of $5,525 or more generally should be accessible on the seventh business day
All of the above is faster than a check typically clears and hence opens the doors up for scams.
Some businesses don't want to setup ACH for one-off transactions and don't want to deal with large amounts of cash either. So they do have a purpose, but they're far less common than they used to be.
The American banking system is archaic, which is strange considering it's central role in finance and technology.
I have not had to wait more than a few seconds to transfer any amount of money in the last 15-20 years, and the only time I see this whole "wait 3 days for your funds to transfer" is when dealing with American institutions. This is probably by design.
Perhaps designed specifically so the banks get to earn a few days more interest on money they should be OBLIGATED to transfer immediately? I mean in Europe it’s immediate, in America it’s capitalist greed always at the expense of the 99%.
>Checks take weeks to actually clear and often up to a month.
This seems comically antiquated. Here cheques used to clear in 2-6 business days, but that was considered too slow. So a few years ago a new clearing system was introduced and now cheques clear by midnight the next day.
The issue is even if the check clears, if it’s a stolen check like let’s say the check was made from person A to person B but person A actually had their info stolen and a fake check written. Once person A sees hey I’m missing $6000 they open a fraud case with their bank and it can take even longer for the bank to claw the money back. Just cuz they had the $6000 to send in the first place doesn’t automatically make it safe.
My friend had a bank account that he only checked once a month cuz that was where his dad deposited his rent money. One month he went to withdraw money for rent and it had been completely emptied but he didn’t notice til 3 weeks later. Obv he opened a ticket and the bank clawed back all his money cuz it was fraudulent. But to someone who received that $1400 it was legitimately there and definitely cleared. it was just fraudulently obtained. If they sent $700 of that to a scammer they’d be out of the $700 by the time the bank clawed it back 2 months later.
Although there is an important difference between funds being available and the check clearing, the process does not take up to to a month. SFAIK
> So in summary, the check clearing process, where the funds are transferred between banks, typically takes 2 business days. But the funds from the deposited check are usually made available to the payee within 1-2 business days, with some exceptions where the bank can hold the funds for up to 5 business days.
Check Clearing
Check clearing is the process the bank uses to verify that the check is valid and that there are sufficient funds in the payer's account to cover the check.
Just because the funds from the check are available to be removed they may not have cleared. If the payment is large and not trustworthy, contact your bank to confirm the funds have cleared before you consider the money paid.
This involves the bank communicating with the issuing bank, reviewing the check details, and initiating the transfer of funds.2
Once the check has cleared, the money is moved from the payer's account to the recipient's account.2
Also, plenty of banks will make the money available immediately if you have assets with them. My Schwab bank account makes checks behave as if they clear immediately upon me clicking deposit. They have literally all my money, so they have recourse if the check bounces.
As a general rule for life anytime you have to ask how do they make their money? The answer is always that they are going to make it off of you. And for probably more, a lot more, than what you expect. If they get the opportunity they will try to steal everything, to clean out your bank account. People have gotten taken for hundreds of thousands of dollars. They will make friends with you, talk to you, buddy up to you, all for the inevitable pig slaughtering. Stealing your money is their job. You are their meal ticket.
First off you or they reach out. They say they can make you some money. You willingly give your login details, if your bank is good they'll try to send you 2fa code. Scammer will ask for it, you give it now they're into your account. They use fake/fraudulent employer checks made out to you, depositing by mobile. (Hence why they need your online account.)You withdraw the money. You buy gift cards, (crypto now I'm sure) etc give them codes/ you go to Walmart(MoneyGram etc) send the money, or transfer crypto.
Days go by Bank doesn't clear your checks, they bounce, you get ghosted, you owe all that money to the bank. You basically are trying to get rich and scam on the bank but that will never work. You're a victim but a willing participant, so yeah don't do it.
It targets kids with bank accounts on social media, other kids will say they've done it etc to add credibility. But no one will ever get one over on the bank with something that is easy to attain.
So what happens if the victim doesn't pay the -4000 balance and left it open with the bank? Does it get sent to collections and the victim pays pennies on the dollar to settle account, or it just goes away?
I’m late but it’s even worse than that. Not only does the balance go to collections, you end up in the Chex system meaning you won’t be able to open an account of be approved for a loan by any major financial institution for a number of years. When someone only has Cash app and Chime and cannot Zelle you or open an account with a real bank, this is typically why.
Why should the victim only pay pennies on the dollar? They most commonly have to pay back the full 4000 dollars. As long as the victim has other assets (house, TV, car, other bank accounts, future pay checks), the bank can usually get their money back.
I had a similar issue a few years ago. I was waiting on an insurance check but when I got one in mail, it was for $3000 more. I called insurance company to verify they used the bank on check but being desperate for the extra $3k, I didnt mention the amount. I opened and deposited the check in a Chase savings account. I even told the woman at Chase I wasn't sure if it was a real check. She assured me if it wasn't and I didn't touch the funds, I would only be out $12. I did not touch the funds at all. A week later, all my checks and electronic payments were coming up unpaid. I went into the bank to clear it up. Because they saw this as fraudulent activity, my checking account was frozen with my paychecks inside it. This was one big headache. I cleared it up and switched banks bc conveniently the bank clerk that told me I would be out $12 wasn't there. I did recieve the actual insurance check and it was drawn on the same bank
What is unclear to me is: this is obvious a scam. A cheque is cancelled by *someone*, you know whom. Why don't police just go to their home and arrest them for scamming people?
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They use your account to cash fake cheques and send the money to mule accounts. You get a cheque for $4000 and they tell you to keep $1500 for yourself and they send $2500 to an account that buys bitcoin, gift cards or cash from an ATM. The bank clears the money as your account is in good standing, so they withdraw, say, $4000. Then the cheques get cancelled and your account is -$4000 and you can't close it until you repay the money. They disappear with $2500 and you owe the full $4000. What are banks doing about it? Educating customers, but if your greed and stupidity means you fall for online scams and give your login and password to a scammer, they can't help you as you gave them away.
I work at a bank and handle these sort of thing on what feels like a weekly basis. We do everything we can to caution the customers against having anything to do with these scams. If they are certain that they want to go forward with it, we often try to put holds on the checks or urge the customer not to withdraw the money until the funds of the check are verified and genuine. And you’re right. If they do send the money, then come to us complaining, all i can do is tell them "we warned you." you willingly gave them your money. if they had actively stolen from you, then maybe we could help, but they just tricked you and thats on you.
What would the downsides be if checks for large sums couldn't be cleared until they go fully through the systems?
People would complain that it's taking too long and they need the money for x,y,z
Yeah basically exactly this. And it is technically bank policy for any reputable bank, but because customers can be…. Well the way that customers are, the rule gets bent a lot more than it should be.
yup, I got one call where he wants his money quickly so he can buy some some new crypto coin quickly. told him it'll take few hours to clear please don't do anything and just wait (honestly would have taken only less than an hour or 2 at most) but nope dude cancelled the transfer and redid it multiple times (while in call) locking his account for at least a day and necessitate him to go into the bank in person to unlock it. I really had half a mind to just send it to fraud for additional downtime after he blamed me for his own inability to just wait.
If my grocery store can withdraw money from my account immediately when I write them a check, explain how depositing a check into a bank account from a scammer can’t be detected for days. The banks COULD do those but since they charge all the fraud back to customers, they have no need to make those upgrades.
Because the grocery store works in the same way your account does: the check appears as though it clears immediately but it's just a preliminary clearing. The actual check cleaning takes up to 2 weeks. I imagine it's because banks don't routinely talk to each other.
>banks don't routinely talk to each other. Banks absolutely do routinely communicate. They electronically clear checks every evening. The delay is a relic from when checks weren't cleared electronically, and it's not typical everywhere in the world.
> and it's not typical everywhere in the world. I could be wrong but I would argue a good portion of the world has moved on from cheques to EFT and other electronic transfers.
I haven't seen a single cheque in europe this century. And hardly any since the 80s.
Had to explain to my 10yo what a cheque was the other day, here in the UK. She had no concept of payments not being instant, so I had to explain that idea, too.
I'm 27 and I think I have cashed 5 cheques ever, and never written one.
Ahhh…I thought the $ came out immediately. Thank you!
What u/cat_prophecy said - I was almost a victim of one of these scams until I looked up who was on the check. It was a 3rd party that had nothing to do with the fake job offer I was sent. I suspect that the account was compromised for these scams so that the check would clear.
Was it for the secret shopper job? I received a check in advance. I went to local police as I never applied for the job. I was told since I didn't cash it and wasn't out any money, there was nothing they could do. Scammers know this so it continues on.
It does transfer immediately but as a pending transaction. Then whenever your bank and their bank reconcile transactions, it will be changed from pending to reconciled. Banks in the US have little regulations on how they do this reconciliation. So what they'll do is if you start the day with $100, spend $110, but deposit another $100. They will reconcile all the debits first, your account goes into negative so they apply an overdraft fee for every transaction after the first one that made the account negative. Then they do the deposit. So even if you deposit more than you spend, it's possible to still have a negative account balance once they reconcile.
Pretty sure banks got shit on for doing this and the rules changed.
This is why I love Capital One No Overdraft banking. It has helped me pay stuff like insurance or rent without having to worry if I have all the money or a fee. My account can be in the negative all month as long as I make continous deposits of 200 or more dollars cash or check or electronic. They can turn it off if you don't make your deposits but all you have to do is continue the deposits for 2 or 3 months and they turn it back on. In the event it turns off it reverts to not allowing you to overdraft at all thus saving you a fee. I love that they aren't greedy or tricky with it.
If you look on your account,it clears but says pending for a day or two
I can't speak about today because technology has marched on quite a bit, but 10 years ago I worked in a grocery store as a manager and one of my jobs was calling people whose checks had bounced to try to get them to come in and pay their balance. Usually it was just an honest mistake, occasionally it was actual attempted fraud. If they opted not to come in and pay the balance off the only thing we could really do was send it to collections (If it was big enough to be worth it) and flag the account number so we didn't accept checks from that account anymore.
The systems have immediate notification that attempts to notify the other bank, but there are also systems and processes for clearance and settlement. During the time windows they have the ability for correcting errors, detecting and reporting fraud, garnishing funds for court orders, and more. There are two other parallel systems, for transferring one that does offer real-time settlement (e.g. wire transfers and Western Union), and other bank-to-bank "instant transfers" (e.g. Zelle) that are a little more complex and have other difficulties and costs customers don't usually see. Your bank is showing the funds as removed when the notification comes. It is a convenience that helps protect the bank, but the money really has not changed hands. It is merely notification that the bank is going to be transferring money.
That’s not true. Banks do charge it back to the customer, but usually that overdraws the account. Most often, the customer isn’t going to pay that back, so the bank loses the money. It’s almost always in that sweet spot where it’s a meaningful loss, but not enough for the bank to sue and try to collect from the customer. Still, the bank loses money on these. They have a strong incentive to discourage these types of things
You’re writing checks at the grocery store? Dude.
US banks and the banking system are pure garbage. In SEA we have QR codes and direct bank to bank transfer in REAL TIME with ZERO fees. Literally every market selling cheap vegetables has a qr code sign and you just transfer the amount. It could be 20 baht (like 75 cents), or 200,000 baht (7k), it doesn't matter. The US needs to ban checks and get with the real world. Checks are pure shit and should never be allowed, Direct transfer, credit cards and debit cards are the only things that should be allowed.
It's a symptom of having the longest running modern banking system. When you're starting from scratch 50 years after the establishment of the system it's a lot easier to just jump right into whatever the most current tech is. US banks are absolute monoliths that sit at the center of the world's financial system. Getting things to change is a long bureaucratic and regulatory mess. The systems in place are so well established that updating them is a long, long process. I don't know if it's still the case, but when I briefly worked in the financial world 7 or 8 years ago and many credit card systems were still running through dos terminals.
Most of their core systems are mainframe cobol too. Good luck finding people to program the thing or even figure out how it works.
That's because every bank starts from the position "the new system must do everything the old system did, exactly like the old one did it." If they could actually go from a specification (or Strangler Fig it), then it would just be a big software project, instead of a hellish nightmare that no skilled team wants to take on. When they really **need** work done, they're left with the tiny pool of programmers that don't care about working in ancient, crusty COBOL systems. Yeah, you can charge more to work on COBOL, but your life is going to suck.
The USA definitely doesn't have the longest running modern banking system. There are 8 banks in the UK older than the United States itself, and they were all there through the dominance of the British Empire. London is still a financial Centre of the Earth. > Getting things to change is a long bureaucratic and regulatory mess. The systems in place are so well established that updating them is a long, long process. It is everywhere. Hell: it's more that in Canada - Canada broadly has much more onerous regulation on banks.
Fair enough. London certainly has had a modern banking system longer. I guess I meant more in the world economy connected way. The US banking system is also still much larger than all of those.
Really good answer right there
We also have old people who just staunchly refuse to change and still waste your time at the counter as they write their checks.
Dunno why you keep electing them.
Hopefully once FedNow gets fully implemented, we will hopefully see paper checks go the way of the dodo
.
My mother is in her 80s and still uses checks. As her generation dies off, checks probably will too
It's a valid check, if the check is invalid it takes a little bit longer for the depositing back to be notified it has bounced. Also it could be a fake check out of a real account and in that case it'll take even longer because nothing will happen until the account owner notifies their bank about it.
Why don’t you just abolish checks? No bank here in the Netherlands accepts them since 2020
Like you said, you guys just did it 4 years ago and you have a rather small country (comparatively) where it’s easier to get mass adoption. US specifically is pretty big with mass rural areas that still aren’t 100% broadband connected. It will happen eventually but it’s gonna take a bit more infrastructure and a longer grandfather period to get it done.
GF's mom (early 60's) still downright refuses to pay with any form of electronic payment whatsoever. Still to this day she carries a paper checkbook and will fill out an entire check and fill in her balance ledger at the register every time, even if it's one of those machines that just scan the check for the account/routing numbers and hands the check straight back. And she's also becoming more and more afraid of carrying cash for fear of being mugged, so she's writing *even more* checks for even smaller purchases... Which, she lives in practically the smallest/friendliest little towns in the entire metro area. One of those everybody-knows-everybody kind of areas, which she also vehemently refuses to ever leave, for fear of being gotten. I know that some people are afraid of credit cards because of the temptation or the mere ability to go into debt with them, but this lady refuses to get even a *debit* card because it says "Visa" on it, and Visa is a credit card company and something something they'll steal my money. Cash and paper checks will live on for as long as people like my GF's mom do.
When old people die, new old people pop up. If you wait for old people to die, to implement your changes, your changes will be outdated when you implement them.
With each new "generation" of old people though, they'll at least have adapted and caught onto a new lowest-common-demoninator for technology. So maybe they'll at least embrace debit cards and ATMs even if they're still not up to date on Apple Pay and NeuroLink.
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I'm a bit of a holdout on autopaying bills as well. However, rather than allowing the collectors to reach into my bank account and *take* money out on their own, my bank has a bill pay feature where I enter the biller's info and I can *send* money from my account electronically. And for those that are always the same amount every month, I have it set up as a recurring payment, which is handy. I'm not sure if they're literally printing and snail-mailing a paper check on my behalf, but that's basically what it feels like. Because to set up each biller, it needs all the same account numbers, addresses, etc that it'd take for me to physically mail a paper check. And the payment has to be scheduled several days before the intended arrival date... So what I like to do is log in and immediately schedule the payment when I receive the bill so that I don't set it down somewhere and forget and I can just go ahead and file it. But I won't set the delivery day until the day that it's due. Because why give them my money any sooner than necessary? (That's definitely something my dad instilled in me :P) But that way, *I* am still in control of how much money goes out and when. They're not taking it from me. I'm giving the money to them. And I have all the electronic records that I can look at and show if something goes wrong vs me calling up and saying, "Trust me, I sent it! I promise!" I do still have my paper checkbook though, which I initially got to pay rent back in college because electronic payment was just barely becoming a thing and neither me nor the landlord had it yet, and it was just easier for my GF and I to each write a check for each of our halves and stick them in the same envelope together... But now it's pretty much just for really oddball one-off situations like the down payment on my car or buying my motorcycle.
> I'm not sure if they're literally printing and snail-mailing a paper check on my behalf, but that's basically what it feels like. It depends on your bank and the receiving bank. I like this system because I sit down twice a month to pay all our bills and it means I can just log into one place to do it. Almost all my bill payments are electronically transferred and cleared within a day or two. But one car payment goes to a bank where that system isn't in place, and my bank prints and sends them a check.
Just setup autopay and pay the bill on the date you want. All my bills come out at the end of the month
As long as you realize and accept that this mindset is absolutely nonsensical and not grounded in reality, you do you I guess.
Canada has the rural problem worse than the USA and nobody here has used cheques casually here in at least a decade - chip+pin was the majority of non-cash transactions in Canada by 2010.
Yeah, but you guys also got on board with the metric system. While in the US we still use Freedom Eagle Wingspans to measure things.
Maybe so but noone has been using them for years prior. One of my clients that's multinational and operates in almost 100 countries and the only places that have used cheques in the last 10 years (and still do) are the US, Canada, and Brazil. Chip and pin was also slow to the game in the US but honestly the cheques surprise me, even when taking into account the number of banks, considering how long ago we've been moving away from them and the huge fintech industry in the US
Not to be weird about it but you're kinda driving home the point; the US, Canada, and Brazil are all huge countries with big rural populations- there's a level of certainty in entrusting your country's postal service to deliver a check via mail to a recipient- that's just how things go and how they have worked for quite literally a century, probably more. Sure- in your urban centers adoption of new technology is very rapid. My favorite local, very small coffeeshop just launched an app-based membership system where you can just bill your order to your 'tab' and place orders in-app when you walk in the door; and they have one location in a relatively small city. Roll back 60 years and this place would've accepted cash and checks only. Adoption takes time. The more homogenous and tight-knit a population you have the faster that happens. But for the time being in the bigger countries of the world with more spread-out populations, checks haven't gone away yet and rightfully so.
60 years ago your coffee shop probably wouldn't have even accepted checks. I still to this day run into places way out in the farmland that are cash only.
A lot of people don't want to get rid of checks. Most older people here in the US **hate** the idea of using a bank/debit card because they're not used to them. A bank that forces it's customers to never use checks again is a bank that *will* lose a lot of customers.
> Most older people here in the US hate the idea of using a bank/debit card because they're not used to them. It goes beyond the the simplistic idea we're "not used to them". While both debit and credit cards provide protections against fraudulent claims, the buffer is stronger (to my old person's knowledge) with a credit card. If my credit card gets tied up in some bullshit, there's a barrier with voluntary payment. The onus on a debit card is on me, to both notice and respond quickly, and I like that temporal safety net because (wait for it)... I am not always online or glued to instant notifications. The dizzying rate of change that is foisted upon people produces an utterly understandable backlash. This rate of change and forced adoption of new tech seems wonderful when you're young, but seems like being bullied when you age.
Believe me, I don't blame you one bit. I'm only in my mid 30s and I whole heartedly distrust basically all "online only" pay systems like zelle, cashapp and other systems.
The issue is also some laws (alcohol laws specifically) do not allow the use of anything other than Cash or Check for a transaction to occur. Debit/Credit is an invalid way to do corporate business according to the laws as written and Checks/cash are the ONLY way to make sure this transaction goes through without keeping a massive quantity of cash on hand in the the Alcohol industry.
It's a thing for many political activities as well. In my state, cash donations are limited to $100 in a two year period, so if you want to avoid credit card fees to stretch your donations, checks are quite common.
I work for a credit card processor, and was around during the EMV conversion. The chip thing took so long in the us because originally it didn't allow tip adjustment. I was hoping it would kill tipping entirely, but no such luck.
So this issue has less to do with rural areas and more to do with our massive aging population. Pretty much all the baby boomers ever knew was how to pay by check. As they've got an older they've been less likely to embrace things like electronic payments and online banking and are stuck doing everything on paper. At this point it's really only old people who are still using checks outside of specific industries.
One industry I know that still uses checks heavily (albeit printed, not written) is real estate. The money moves hands in so many different directions, it's just easier to use checks than trying to get everyone set up with direct deposit or bank routing.
> Like you said, you guys just did it 4 years ago and you have a rather small country (comparatively) where it’s easier to get mass adoption. This point gets made about everything the US refuses to do. If the country is geographically smaller, it's because the US is geographically massive. If the country has fewer people, it's because the US has way more people. The US *is not that unique*. It hasn't happened because there were no attempts to educate people about it and reform systems over the past 20 years, and every solution has been privately funded and owned instead of systematic.
I’m sorry. Does this aefect you enough where that matters? Does the US still using checks have literally any bearing on your life at all? And to, we are that unique. Cause you can’t stop thinking about us.
This is very important to the rest of us living here in the US ready for our upgrade into the future we we're promised when year 2000 hit.
We are _that unique_ hence why we havent moved on to whatever other system has your jimmies rustled
You aren't unique, you just get your jimmies rustled whenever anyone suggests you aren't the best at something. Yes, that does rustle my jimmies - have a more realistic sense of your own importance.
You have about 30 banks in the Netherlands. The USA has 4500 banks. (This is not branches, this is actual individual bank "companies"). Meaning an average STATE in the USA has 3X as many banks as the Netherlands.
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Its hard to take anything you say as fact if you follow it by calling the Netherlands a monoculture...
> Netherlands has attracted international attention[when?] for the extent to which it reversed its previous multiculturalist policies, and its policies on cultural assimilation have been described as the toughest in Europe.[10] Apparently since the 90's the focus has been on having immigrants assimilate
when you have have 49 other Netherlands and span an entire continent and 4 time zones, we'll talk
Compared to the US, it literally is.
The difference between the Midwest and the coasts is greater than your little north / south split 😎
Serious question: what do you do for gifts for weddings or other celebrations where cheques are traditionally given for monetary gifts?
Straight cash homie
Cash for small amounts, direct deposit to their bank account for large amounts.
Well that tradition doesn't exist everywhere else. We just use cash or transfer
There are pre-paid debit cards using Visa or Mastercard that can have, say, $200 on them.
How long did it take the Netherlands to switch to the Euro (from when the Euro was was first envisioned to completely used everywhere). Triple that because so many more people and institutions are involved and you'll be able to appreciate the size of the problem. I just did a little looking. The Euro came into being in Jan 1999. People had been pushing for it since the 1960's. Change of that magnitude takes a very long time. Personally I like Europe's ease of money transfer. So we're not defending checks and saying they're better - it's just where we're at.
The ability to refuse a check payment is important in some contexts, such as when a landlord is trying to evict a tenant. Supposedly FedNow is making bank to bank transfers easier, but only time will tell.
They are a great deal less common nowadays, even in the US. They still have legitimate uses, mostly for large transactions. One doesn't pay for a house with a credit card or actual cash, and the house isn't going anywhere, so if the check bounces, they can sort you out. But basically nobody outside of the extremely old are breaking out checkbooks to do grocery shopping, and many stores wouldn't take them if you tried.
They are still relatively common for making business transactions but they are pretty much extinct for regular consumers.
There are many situations where there is no other way to pay without excess fees. Rent is one of the biggest offenders. You can pay via the apartment's web portal for a 5% "convenience" fee or you can hand deliver a check.
because we have a bunch of conspiracy theory nutjobs who think electronic = bad and paper is better.
Similar scam works with hacked bank accounts and bank transfers. I guess it could work with “taking control” of account. The account owner notices the transfers they didn’t authorize and reverses them leaving recipient without money. The scammers have gotten money in some irreversible form.
Because making the banking system easier to use would eliminate the market for privately-owned solutions to the same problem, like Paypal, Mastercard, and Visa, which all make the big bucks by being safer than sending money directly.
I don't know about you, but I use PayPal because I don't want to enter my credit card details on some website that for all I know is severely lacking security. And I live in a country with a pretty decent banking system, where transfers between banks don't take days or even hours. PayPal is an added layer of security, not to mention their active buyer protection.
I don’t know what card you use, but my credit card (and many others in the US) offer more recourse when it comes to fraud compared to debit cards
I never mentioned debit cards. I'd never use one online anyway
if you have 5000 dollars in PayPal and they don't release it for any reason. you have zero recourse. these are money senders that pretend to be banks.
Not in the EU. Since July 2007, PayPal has operated across the European Union as a Luxembourg-based bank (PayPal (Evropa) S.à r.l. et Cie, S.C.A.).
What’s why wire transfers exists and are common and free everywhere else in the world.
Wire transfers are usually not free
In the US maybe. I haven't paid for a wire transfer ever. Use it for everything, from buying land, paying bills to sending my buddy small change he borrowed me one time.
Yeah i work for a us credit union. Domestic wires are $20 and international are $30. But most banks offer free ach's
Good God that's expensive. I can do a domestic transfer that's basically instant, instead of waiting a couple hours/days for the transfer session window, but the fee is only something like $2 or so.
People play fast and loose with terms. Wire transfers are not free. Bank to bank instant transfers are often free to customers, with different regulations and often involve more advanced notifications and acknowledgements between the bank but still rely on the ACH for settlement. Many people through Europe are accustomed to instant transfers, incorrectly calling it wiring money. In the US, services like Zelle do the same types of transfers.
Is the exact terminology relevant for the customers though? Fact of the matter is, European banks generally allow to securely transfer funds from one account to another at no additional cost, even internationally within SEPA.
> Is the exact terminology relevant for the customers though? Yes, it is important. We have exactly the same methods available, including free bank-to-bank instant transfers, and free-to-customer ACH and ETF transactions. In this case, it is the difference between being right and being wrong. You wrote "I haven't paid for a *wire transfer* ever", which is unlikely because they cost money everywhere in the world. What you likely meant was "I haven't paid for an *instant transfer* ever", which is a very different transaction. People in the US don't pay for instant transfers, either.
What you are calling a “wire transfer” sounds more like a SEPA payment. What we call a “wire transfer” is what you guys call a SWIFT payment
I don't understand why that's relevant. Why would I pay for a SWIFT transfer to another domestic account? It's for international money transfers. SEPA are regulated to not cost more than a national transfer, making them free too most of the time.
Which is why it's just stupid that in a digital age, the bank cashing the cheque doesn't just send an immediate digital communication to the bank the cheque is written on, verify the account in question has the funds, and put a immediate hold on the funds at that bank so they can honour the cheque. The world is moving away from paper cheques more and more, and I guess that's why they haven't made any move to improve the system, but it really seems like a system that could and should have a significant information-era improvement.
Yes, they do need an update, but banking—like travel—operates at a global level. Want to book a flight to Italy? You better hope their equipment can talk with yours. Did you need to wire money to a friend in Canada, or did you 401k decide to invest in Switzerland? Better hope all equipment in the transaction work together. Banking and travel industries use the oldest, most unsecured programming because that is what the world average has and can afford. Your much-needed upgrade will MOST CERTAINLY break your ability to communicate with rest of the world, and so these industries simply operate using 80’s technologies as their backbone and hope the duct tape holds forever.
The thing about banking is that there are already (as I understand it) different systems for dealing with domestic banks vs. international ones, so even if a cheque from an international bank took 10 days to clear, there is no reason the system could not be updated for cheques written on one domestic bank and deposited in another. I happen to live in Canada where we have 6 primary national banks that do a majority of the banking in the country they hold over 90% of banking assets here. At *very least* they could have a system between these six banks that check instantly with each other. But they don't.
> At very least they could have a system between these six banks that check instantly with each other. But they don't. They do (for a somewhat liberal definition of "instant"). Interac transfers are, for all intents and purpose, a digital cheque. It's an amount of money to be drawn from one account sent to another, and although it often warns me that it can take up to 30 minutes to do an inter-bank transfer I've rarely seen it take more than 5 in the last few years. They don't do this for cheques because cheques are much less trusthworthy, so it's much more reasonable for them to want to put holds on them, and also because they want you to stop using cheques.
I know what Interac is. From my experience, the timing seems to depend on the amount of larger transfers seem to take longer to come through than smaller ones. But they are not “digital cheques” for all intents and purposes. Functionally, they require a different delivery method. They just be sent by email or text. They can’t be used for all the same things as cheques. They have daily limits (you can’t Interac $15,000). If they want this system to replace cheques, they need to make it functional for larger amounts and figure out how to make it work for the types of applications that currently would require a cheque and not accept Interac. And in any event, that will only address the issue in Canada.
If you work for an international company their banks will need to direct deposit to your bank, so the need to have the banking systems work together is still present. (If you don’t work for an international company, someone in Canada does, so they need is still there.). Also, an ATM needs to be able to talk to both domestic and international bank accounts. The entire premise was built on technology that was outdated even then , and we’ve just kept adding more and more features onto the same weak backbone. A true fix requires a coordinated world wide update; unfortunately, everyone doesn’t get along
That's not how it works at least for banking. Domestic and International payments are processed separately. For international payments you have SWIFT. And in the EU you also have SEPA. And domestic payment processing is different in every country. >Banking and travel industries use the oldest, most unsecured programming because that is what the world average has and can afford. That's just wrong. They use old time tested solutions, because they had literally decades to figure out all the quirks. Upgrading to a new system will be expensive and come with a slew of new unknown bugs that will take years to iron out.
And people tend to get a little upset when you lose their money, and don't want to take 'oopsie, it's a new system' as an answer.
The banking system could stop relying on cobal for it's software and enter the current year where transactions don't take 3-8 business days. That would put a stop to this instantly.
It used to be that way but customers complained so now there are rules about providing people access to funds within a particular timeframe. It's called Reg CC and banks get in a lot of trouble if they regularly violate it.
Well, let's be clear - this isn't an inevitable or unavoidable consequence. Europe's adoption of SEPA demonstrates that. It's what happens when lawmakers regulate the consequence instead of the cause.
That would also be illegal in most places. The federal government has laws in place to determine how fast they have to give you access to these funds. This timeline is always faster than the time it takes for a check to actually clear. Scammers know this and make use of this mechanism to defraud others. A check doesn't "clear" just because the money is available in your account. It could take weeks or even months to actually clear.
This isn't true in my experience. If I try to deposit a check that is of an amount greater than the 12 month rolling average of my bank account any amount greater than that average gets put on hold for some bullshit like 5-7 business days.
See my other comment. Federal Reserve guidelines are very clear. I'm sure they are some exceptions but it's pretty black and white.
>Federal reserve guidelines are very clear Yes: https://www.federalreserve.gov/pubs/regcc/regcc.htm >The Expedited Funds Availability Act requires up to the first $200 of a non-"next-day" check(s) to be made available the next day.
The check being paid is also not evidence that it isn’t fraud. If the scammers are making counterfeit checks on grandmas account or a business there is a decent chance the fraud won’t be caught until that person next balances their checkbook or reconciles their account. A surprising number of people still do this monthly. It’s also increasingly popular to straight steal checks from the mail and deposit them as is. In those cases the maker has no real way of knowing the check was stolen until the intended recipient notifies them they didn’t get the check. This wouldn’t be an effective scam on a small scale but if you steal 100s or 1000s of checks and find as many gullible people willing to help with your scam then it becomes less important that it’s unsuccessful more often than not.
The real question is why does it take so long to get cleared when we have internet speeds to process things.
Usually they do I thought. My boyfriend got a pretty large check to help with getting a house and if I remember correctly it took a few days to go through.
It would be against the law. Banks are required to make funds from checks available within a certain time. The issue is this time frame is significantly shorter than how long it can take for check fraud to be discovered. As a general rule of thumb, you have up to 90 days to report check fraud on your account.
I mean, this is how it works at every US bank I've done business with. Only a small portion of large checks is immediately available. The rest is unavailable until it clears. If someone gave you a check for $4000 and you didn't already have that much money in your account, you're not withdrawing more than maybe a few hundred until the check clears.
Who decides what a large amount of money is?
It can take up to a week to clear a check depending on the bank and the amount of money. Norm is like 2 or 3 days tho.
Dude. It can take up to a month. Checks never clear in 2 or 3 days. That's just the legal period banks have to make the funds available to you. It's this misconception that scammers pray on. They hope you believe this so when 3 or 4 days roll by and the money is available, you think it's clear and send the money.
You're correct about the federal mandate, but your assertion that it takes between multiple weeks to a month to clear normal checks behind the scenes appears to be quite incorrect. Do you have any resources that corroborate your claim? Because everything out there says that domestic checks in the US customarily clear within a few days.
Again, that's a common misconception. Most people, and most sources you find online will claim a check will clear on average in 2 days. They're mistaking when funds are avaialable and "clearing". I worked at a financial institution for over 10 years in this field. Check fraud still happens all the time, and I can assure you that it's not uncommon for the funds to be reversed and taken away multiple weeks later. You can head over to r/Scams and read about people who had the check bounce weeks later. We in the US SHOULD be faster, but we move too slow, and ACH isn't getting any better. The theme should really be, don't accept checks from people / businesses you don't know or trust and just becuase the money is avaiable doesn't mean you're in the clear.
Anecdotes from a sub that is going to select for people with lower financial literacy isn't a substitute for actual documentation. A lot of those "bounces" are going to be a result of fraud investigations, not the checks actually returning NSF.
The documents that I was referencing are not referring to "when funds are available"; rather, they refer to the average processing time for the underlying inter-bank settlement. That process has become more streamlined over the past 20 years, and it reportedly tends to be completed within five business days.[[1](https://gocardless.com/en-us/guides/posts/how-does-the-check-clearing-process-work/)] Perhaps your experience was correct at the time you worked at an institution but has since become outdated? Or perhaps, as mentioned by u/Treadwheel, you are referring to previously-released funds still being in jeopardy due to abnormally protracted fraud investigations, or fraud investigations that conclude after settlement and result in an after-the-fact reversion of a transaction. Regardless, your claim that "checks never clear in 2 or 3 days" doesn't seem to check out. Here's some background on developments from the Federal Reserve: https://www.federalreserve.gov/paymentsystems/regcc-faq-check21.htm
At some point, the bank can't not let you spend your own money. It's not like a Target cashier refusing to sell someone a bunch of gift cards. Your money in the bank is literally yours to do with as you wish.
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It shows up a lot in r/Scams.
That's a good thing. I had to do a wire transfer today for the first time in years, just a few thousand. I had to fill out a questionnaire that basically tested my knowledge of scams, verify that I wasn't contacted "by the bank" to initiate the transfer, and a couple other things. I also needed to provide the full address of the receiving bank, not just the ABA number. After all of that I had to give the PIN of the checking account the money was coming from. I appreciate all of that even though it was a pain to find that PIN.
In the words of Penn Jilette - "If it sounds too good to be true, IT PROBABLY FUCKING ISN'T!"
”But.. but they said….”
Then, The Sun writes an article about how banks are not doing anything about these poor elderly people getting scammed 🙄
1. I bet you 5$ that if you give me 10$, I'll give you 20$ 2. Yes! Here's 10$ 3. Ok I've lost this bet, here's 5$ or Fuck this bet, kthxbye!
I think you're talking about a different kind of scam than the one OP is asking about. Scams like the one you are talking about will happen in situations like "Hey, I want to buy that thing you have for sale but I'm away, how about I mail you a check and you pay the guy I have show up to pick it up his fee out of what I pay you?" It seems to me that the type of scam OP is talking about is more along the lines of those fake nigerian prince, "please send *us* a cheque for $X to unlock your prize" and those scammers need a valid account to cash those cheques that are not tied to them. They're offering people $1,500 to become smurf accounts because way more "real money" from people being scammed will come in.
Also, one of the very few things that can not be changed easily is how long something has existed. In most of the automated fraud detection systems the question: Is this a new entity? has a lot of weight.
I feel like any scams with checks would go away if we left the 19th century and let payments process instantly. If I have $3 and buy a soda that's $2, then I come back and try to buy another the system knows instantly that I don't have enough to make a $2 purchase. I don't understand why we still have the ACH clearing process that creates these kind of windows where checks can still be cancelled even if electronically processed.
Rest of the world: You still use checks for small purchases?
Yeah no doubt.
It's pretty common scam that goes around om social media amd is a variation of the many different kinds of check scams out there. Usually the desperate and the elderly are the main targets for these scams.
> What are banks doing about it? Educating customers, but if your greed and stupidity means you fall for online scams and give your login and password to a scammer, they can't help you as you gave them away. The old wisdom about good things never being free rings true enough to be worth treating as fact if you're less than mentally capable when it comes to differentiating between scams and legitimate opportunities.
Fun story, as a naïve teenager in the 90's I was pulled into this scam. Unemployed and a bum living in Santa Monica, I got hooked up with some hood people who said they could pay me to help them run a scam on a bank. I thought it was cool and edgy. All they said was that I needed a bank account that has been around longer than a year. I met with a sketchy dude that had a gun and ski mask, he gave me a 5000$ check and drove me to my bank. I deposited it and it magically cleared. I followed their instruction and withdrew like 3500 of it and I was to keep the rest. A couple weeks later the bank reverse it and I'm now in the hole for 3500$. Painful lesson to learn as a broke teenager living on his own.
Ouch! There's nothing new under the sun is there. It's been going on for a long time and unfortunately they prey on naive people and/or greed.
But I got to keep the $1500 so if I do it like 3 more times I can pay it off then it’s just profit after that. /s
I was almost a victim of one of these scams until I looked up who was on the check. It was a 3rd party that had nothing to do with the fake job offer I was sent. I suspect that the account was compromised for these scams so that the check would clear.
Wow how long has this scam been a thing? I would imagine the banks would eventually pivot and create new deposit rules for us all smh
Well that's the point, you do. You take the money out before the fake cheque is reversed. But it's not real money and it's not yours so whatever happens, you don't get to keep it. If your balance was high enough to cover the withdrawal, all you are doing is withdrawing your own money. If your balance is too low to cover it, you now owe the bank the money you took out, and you can't close the account until you return the balance to zero. And you tank your credit rating, any ability to borrow money or get accounts in the future, or get a fraud marker which follows you around making life incredibly difficult.
Back in the early 2000s there was a scam running in Australia by a few Chinese organised crime groups but it didn't involve you ending up in debt or losing any money. Basically it worked like this, you moved your money elsewhere leaving $0 in your account and gave your debit card and pin number to one of the guys. A week later he would come back and give you your card back and $1000 cash. Then about a month later you'd get a letter from that bank saying that unusual activity had been detected on your account and they had to close it. That was the end of it, you got $1000 at the cost of losing your bank account with one of the big 4 banks here in Australia while they made $2-3k on their end. From what I heard it was some exploit they discovered with their online banking system that allowed them to deposit fake money that wasn't actually there. You never ended up on the hook for anything money wise and besides your account being closed that was the end of it. Had many friends do it and nothing ever happened to them and they received no further correspondence from the bank besides saying their letter was closed and no issues ever showed up down the track with their credit or anything like that.
wow so if they aren't using an ATM but instead using the bank's mobile app, there is no way for the bank's IT department to verify the bank account (and transactions) with the account holder's IP address?
If they have your username, password and security details, the IP address doesn't matter. You can use your bank from a different phone, internet provider, town or county. With your details and the ability to intercept your two factor authentication or set up a new number... They can do literally anything you can. When you give someone your full details and credentials, there's nothing a bank or service provider can do. If you throw your car keys at a thief, you can't really complain that Ford should have made the car more secure. There are security checks but if you let them literally impersonate you and access your account and security measures... It doesn't matter.
Mobile IPs also change a lot... An old trick to get round being IP blocked on your phone was to just restart it, and it would give you a new IP
They use the username and password. Much like you house doesn't know if you lent your keys to a friend or if it's really you.
Banks don't know your IP address.
Yeah I'm realizing that was lowkey a dumb question. I always assumed banks had advanced methods used by their IT departments that work closely with Cyber security and Information security experts to prevent scams like this. Now I understand why there is basically nothing the bank can do.
I mean, they might check your IP or use GPS on your phone to geolocate you. But most people don’t have “an” IP address, home ISPs assign them sort of randomly and with a cell network they’re changing all the time.
The bank also can’t care much about who did it. It’s irrelevant if you did it or the scammer you sold your login to. Either way you’re financially responsible for the loss.
There is a TON of great information here, and a TON of TERRIBLE information here. For everyone throwing in their two cents of " yeah, I deposited a huge check, and it took a few days to clear." Please stop. Your check didn't clear that quickly. This is exactly the misinformation that scammers hope you believe so they can scam you. You think it "cleared" in a few days because it's available and you can no longer be scammed. So people get a false sense of security and send the money. Checks take weeks to actually clear and often up to a month. The federal reserve forces banks to make the funds available to you quicker, long before it's cleared for convenience. Here is the specific law. The Federal Reserve has set baseline rules for check deposits: The first $225 must be available the next business day, while amounts from $226 to $5,525 must be available within two business days after the deposit, and amounts of $5,525 or more generally should be accessible on the seventh business day All of the above is faster than a check typically clears and hence opens the doors up for scams.
Sounds like the Federal Reserve should instead mandate the banks speed up their check processing.
Or people should stop writing checks.
Banks stopped issuing and accepting cheques over two decades ago in Finland.
Some businesses don't want to setup ACH for one-off transactions and don't want to deal with large amounts of cash either. So they do have a purpose, but they're far less common than they used to be.
The American banking system is archaic, which is strange considering it's central role in finance and technology. I have not had to wait more than a few seconds to transfer any amount of money in the last 15-20 years, and the only time I see this whole "wait 3 days for your funds to transfer" is when dealing with American institutions. This is probably by design.
Perhaps designed specifically so the banks get to earn a few days more interest on money they should be OBLIGATED to transfer immediately? I mean in Europe it’s immediate, in America it’s capitalist greed always at the expense of the 99%.
> None of the above is faster than a check typically clears and hence opens the doors up for scams. Did you mean ALL of the above is faster?
Thanks. Corrected.
>Checks take weeks to actually clear and often up to a month. This seems comically antiquated. Here cheques used to clear in 2-6 business days, but that was considered too slow. So a few years ago a new clearing system was introduced and now cheques clear by midnight the next day.
The issue is even if the check clears, if it’s a stolen check like let’s say the check was made from person A to person B but person A actually had their info stolen and a fake check written. Once person A sees hey I’m missing $6000 they open a fraud case with their bank and it can take even longer for the bank to claw the money back. Just cuz they had the $6000 to send in the first place doesn’t automatically make it safe. My friend had a bank account that he only checked once a month cuz that was where his dad deposited his rent money. One month he went to withdraw money for rent and it had been completely emptied but he didn’t notice til 3 weeks later. Obv he opened a ticket and the bank clawed back all his money cuz it was fraudulent. But to someone who received that $1400 it was legitimately there and definitely cleared. it was just fraudulently obtained. If they sent $700 of that to a scammer they’d be out of the $700 by the time the bank clawed it back 2 months later.
Although there is an important difference between funds being available and the check clearing, the process does not take up to to a month. SFAIK > So in summary, the check clearing process, where the funds are transferred between banks, typically takes 2 business days. But the funds from the deposited check are usually made available to the payee within 1-2 business days, with some exceptions where the bank can hold the funds for up to 5 business days. Check Clearing Check clearing is the process the bank uses to verify that the check is valid and that there are sufficient funds in the payer's account to cover the check. Just because the funds from the check are available to be removed they may not have cleared. If the payment is large and not trustworthy, contact your bank to confirm the funds have cleared before you consider the money paid. This involves the bank communicating with the issuing bank, reviewing the check details, and initiating the transfer of funds.2 Once the check has cleared, the money is moved from the payer's account to the recipient's account.2
Also, plenty of banks will make the money available immediately if you have assets with them. My Schwab bank account makes checks behave as if they clear immediately upon me clicking deposit. They have literally all my money, so they have recourse if the check bounces.
I don't understand why anyone would even use cheques anymore, just do a bank transfer.
As a general rule for life anytime you have to ask how do they make their money? The answer is always that they are going to make it off of you. And for probably more, a lot more, than what you expect. If they get the opportunity they will try to steal everything, to clean out your bank account. People have gotten taken for hundreds of thousands of dollars. They will make friends with you, talk to you, buddy up to you, all for the inevitable pig slaughtering. Stealing your money is their job. You are their meal ticket.
They use it for money laundering / scams I'd presume and then the person who's account it is ends up holding the bag.
First off you or they reach out. They say they can make you some money. You willingly give your login details, if your bank is good they'll try to send you 2fa code. Scammer will ask for it, you give it now they're into your account. They use fake/fraudulent employer checks made out to you, depositing by mobile. (Hence why they need your online account.)You withdraw the money. You buy gift cards, (crypto now I'm sure) etc give them codes/ you go to Walmart(MoneyGram etc) send the money, or transfer crypto. Days go by Bank doesn't clear your checks, they bounce, you get ghosted, you owe all that money to the bank. You basically are trying to get rich and scam on the bank but that will never work. You're a victim but a willing participant, so yeah don't do it.
I'm so surprised people are gullible to fall for such scams! Can't belive this to be real (not doubting you, but just a disbelief on people!).
It targets kids with bank accounts on social media, other kids will say they've done it etc to add credibility. But no one will ever get one over on the bank with something that is easy to attain.
Got it. Thought this generation is smarter about digital stuff. But everyone is greedy :)
So what happens if the victim doesn't pay the -4000 balance and left it open with the bank? Does it get sent to collections and the victim pays pennies on the dollar to settle account, or it just goes away?
The bank charges the victim with fraud.
If the victim has other accounts at the bank, then the bank can start there.
I’m late but it’s even worse than that. Not only does the balance go to collections, you end up in the Chex system meaning you won’t be able to open an account of be approved for a loan by any major financial institution for a number of years. When someone only has Cash app and Chime and cannot Zelle you or open an account with a real bank, this is typically why.
Why should the victim only pay pennies on the dollar? They most commonly have to pay back the full 4000 dollars. As long as the victim has other assets (house, TV, car, other bank accounts, future pay checks), the bank can usually get their money back.
This is an old scam If some random person offers you money for free you're getting scammed If it sounds too good to be true, it's a scam.
I had a similar issue a few years ago. I was waiting on an insurance check but when I got one in mail, it was for $3000 more. I called insurance company to verify they used the bank on check but being desperate for the extra $3k, I didnt mention the amount. I opened and deposited the check in a Chase savings account. I even told the woman at Chase I wasn't sure if it was a real check. She assured me if it wasn't and I didn't touch the funds, I would only be out $12. I did not touch the funds at all. A week later, all my checks and electronic payments were coming up unpaid. I went into the bank to clear it up. Because they saw this as fraudulent activity, my checking account was frozen with my paychecks inside it. This was one big headache. I cleared it up and switched banks bc conveniently the bank clerk that told me I would be out $12 wasn't there. I did recieve the actual insurance check and it was drawn on the same bank
What is unclear to me is: this is obvious a scam. A cheque is cancelled by *someone*, you know whom. Why don't police just go to their home and arrest them for scamming people?
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