The bank would report to the credit bureau that the account was closed "in negative" because the account is -$3500. They are going to send bill collectors after him for that amount... provided he took the money out of the account.

Sorry if this question is daft, but why do banks always go after the person depositing the check, and not the writer of the check? It is very probable that the person depositing a fake check is not aware that it's fake, while the person who wrote it certainly is. Wouldn't the criminal act here originate with the check writer?

Wow...

Scammers still use checks? Who uses those things anymore?!

/Sarcasim

The scam artists are getting craftier and craftier. The sad part is that they are getting better and operating faster than banks can keep up.

@DrGirlfriend: The history of check kiting. Rent "Catch me if you can". Great flick.

Most of the time, bad checks come from the depositors trying to rip off the bank. Going to a bank where you often due business is a great way to earn their trust.

Opening a new account just for the check was half-smart, and all stupid

Not even 1/2 smart. He should have requested documentation from the 'organization' before he even thought about going to the bank.

As it stands all he has is substantial proof that he didn't actually commit check fraud *when* the FBI comes knocking on his door.

IMHO

1) have your brother sit down with the bank manager to explain the situation from his side (best advice is to have him write everything down in a letter beforehand so he keeps his story straight & submit a copy of this letter to the manager) - he should not have any type of "fraud" reported since technically he is a victim.

2) consider having him file a police report. as i already stated - he is a victim of fraud here.

3) have him pull his credit reports from the big 3, BUT ALSO have him check his chexsystems report (also free annually b/c of FACTA) via the info from this link --> [www.consumerdebit.com]

this is most likely where his "fraud" will be reported & it will impact his ability to open bank accounts & write checks if he does not rectify this. MOST BANKS WILL NOT OPEN AN ACCOUNT & MAY CLOSE AN EXISTING ACCOUNT IF THEY RECEIVE NOTICE OF FRAUD THRU CHEXSYSTEMS! this is a huge red flag.

3) stay on him to rectify this NOW (& make sure he stays on the bank to rectify this NOW). it's in his interest not to have anything show up anywhere vs. having to clean it all up later.

@DrGirlfriend: There is no reason, beyond that it's easier for the banks this way. You would think the bank has the responsibility to validate the check, since the person depositing it has no way to validate the check.

@xkaluv: How is his account in the negative? He deposited a check worth zip and withdrew nothing. His account is at 0.

Did I miss something? What did the creator of the bad check get out of this transaction?

@Corporate_guy: banks often have no way to validate a check either - our avenues are pretty much the same as a consumer's: we can call the bank the check is drawn on & verify that the account exists & there are funds available. THAT IS ALL (& many banks don't even provide that service). banks don't release any other info to other banks.

if you are given a suspicious item, bring it to a bank & discuss it with a bank manager - they can strategize the best method to proceed & can often identify fraudulent items before you deposit them & end up in this situation.

@DrGirlfriend:

Banks deal with the person who dealt with them, then that person deals with the person who delivered them the bad check.

That's just how it has to work.

Most of the time the person depositing the check is committing the fraud, anyway.

Man.. I had no idea something like this could create such a mess.. Thanks to the Consumerist for opening my eyes to problems like this!

Funny ass picture.

@mac-phisto: "if you are given a suspicious item, bring it to a bank & discuss it with a bank manager"

at which point you should be aware that they may quite possibly call the police on you.

@DrGirlfriend: We know that to be the case in this incident, but why would you say that is probable in general?

@testsicles:
Wait - you think they'd call the police on a person who brought a check to them and told them he thought it was suspicious? That makes no sense. Why would someone who is trying to defraud the bank go to the manager and tell them he thinks he's cashing a suspicious check?

No, what he did was suspicious. Asking the bank to verify the validity of the check would not get you in trouble.

My first thought is that it looks awfully suspicious to open a new bank account to simply cash one check.

I would have asked the bank to verify the check before letting it anywhere near any of my accounts.

What @PinkBox: That's what I think, too. From the bank's viewpoint (and the FBI's), it certainly looks suspicious. He thought the check was rotten but wanted to get the money anyway.

I'm also not clear on how or why he applied to an organization for a scholarship that was some sort of scam.

Some essential information is missing here, but it looks like he knew he was doing something wrong and wanted to see if he could get away with it without getting caught.

If I had a suspicious check, I would talk to my bank and be sure not to withdraw the money until a long time (months) after it cleared.

@PinkBox: You're right that it is suspicious, that's why many banks will hold the funds for an initial deposit for up to 10 days to make sure the check is legit.

@mac-phisto: Thanks for the link, I haven't had any problems occur, but I ordered a report just so I can make sure my report is clean.

@mugsywwiii: "Wait - you think they'd call the police on a person who brought a check to them and told them he thought it was suspicious? "

Yes, they will and you better believe it! Now, it depends on the check and circumstances I'm sure, but possession of a fraudelent check on financial instrument will often lead a bank to call the police on the person who brought it to their attention, i.e. YOU! It doesn't mean that you will be arrested but you will need to explain the situation to the police and hopefully you can.

Yea, I just went to that site, annualcreditreport.com, and it IS NOT FREE. I checked equifax as my credit reporter, I filled out the info..and they offered me a credit report for $7.95.

How is that free? Do you guys have a fact checker on these things?

The only 'free' thing I've ever seen anyone get in the mail, was a stereo system. This was back in like the 80s' and somehow my friend got sent to him a brand new, and expensive, stereo system. It was addressed to him, but his parents, nor anyone else ever took credit for buying it. It was very odd. In any case, he used it for as long as I could remember, and no one ever came looking to try and claim it.

I have to agree with the comments, that cashing a 'random' check is 100% foolish. These seem to fall under 2 major categories

1) MAJOR fraud. Stuff like 'cash this check then send us the money' kind of thing. Ironically this falls under the category of mail fraud, so its a federal crime.

2) MINOR fraud. These are those 'here's a check for $10, but don't look on the back because then you'll notice that you've just signed up for a $30/month charge' or changing your utility provider, etc.

@linus: A majority of the time, bad checks are due to "split-deposit" fraud and come from fraud rings. They steal IDs and bank info from a bunch of people, open up fake accounts at one bank with bad checks and then use checks from the fake account to get cash from a legitimate account with a stolen id (many banks will make a person deposit part of a check if the balance isn't there to cover the full amount, but the fraudster still gets cash back). This was the most prevalent type of fraud at the bank I used to work at, if a teller doesn't post-memo the funds going back to the fraudster- they can hit five or six banks easily in an afternoon with the same scam.

@PinkBox: Most accounts are opened with a single check. Banks can do little to verify a check unless it's from one of their own accounts. Call one up to verify funds and they often won't say much about the account because of privacy laws.

@Samuelm456: Unless you've already requested your credit report in the past 12 months, then it should be free of charge.

@tmed: I am saying that if the 2 parties (recipient and check-writer), if only one party is awrae that the check is bad it would likely be the writer. I'm not saying the recipient never knows that it's a bad check, but I would think that if the bank is going to assume wrongdoing and alert the FBI, it would do so on the checkwriter first.

Thanks for the responses.

Annual credit report.com IS FREE, just don't sign up for the shit that equifax, transunion, etc will TRY to get you to buy.. that's how they make your money.

You are entitled to one free credit report each year.

@mugsywwiii: I think someone reported a year ago exactly that happened. Hi, this check is suspicious. Manager: You're right, I'm reporting you.

It's stupid. Probably the safe way to do it would be to talk to the manager, get them to put in writing acknowledging you're reporting a suspicious check and asking you to provide it to them for verification, then going back out to your car to fetch the bad check.

I agree that the really strange part is not trying to scam the brother out of real money. Were all the places the brother applied to legitimate? (i.e. no Nigerian scholarships he found on the internet just needing a SSN?) Did the check say it was from one of the places that he'd applied to?

@satoru: they do try to sell you some other stuff but you can decline and still get your free report. maybe he didn't read it and only saw the $7.95 credit protection or whatever it is they try to tack on.

@DrGirlfriend: I meant "of" the 2 parties, not "if"

@PinkBox: Yeah, that's what I was thinking, it looks pretty bad for the brother to open an account just to deposit a check. So basically your brother deposited a check that you guys strongly believed was fake (as evidenced by opening up that new account), it turns out to be fake, and your brother is accused of check fraud, so you post the whole thing on the internet? From a legal standpoint that was probably a bad idea, as if they were serious about pursuing check fraud charges (I doubt they are), this post could be used against you. Please people, don't post details about pending, or potentially pending, legal issues on the internet as it can come back to bite you.

I stopped doing business with Wells Fargo after I presented them with a check written by another Wells Fargo customer and asked them to check that it would clear. They basically refused, and then hit me for 20 bucks when it failed to clear. Banks CAN tell you if one of their checks is good, but they choose not to because they can slap you with a fee for trying to redeem such a check.

A while back there was a story about a guy who went into a bank, and handed them a check from a Craigslist deal. It was a check written against their bank. He asked them to verify that the check was legit. Next thing he knows, security throws him to the ground and he is arrested. The bank decided the check was a fraud, and blamed him. He spent several thousand dollars clearing his name, and the bank is totally of the hook because they reported the "crime" in "good faith".

Moral of the story : The banks think your a criminal. They can tell you if checks are good, but won't for reasons of their own.

@mugsywwiii: "Wait - you think they'd call the police on a person who brought a check to them and told them he thought it was suspicious?"

see:
@P41: "I think someone reported a year ago exactly that happened. Hi, this check is suspicious. Manager: You're right, I'm reporting you."
@jadenton: "Moral of the story : The banks think your a criminal. They can tell you if checks are good, but won't for reasons of their own. "

I can't stress this enough, stay away from suspicious checks!

Well, what ARE you supposed to do with suspicious checks, then? You can't deposit them, because you risk getting hit with fraud charges; you can't ask the bank if they're legit, because you run the risk of getting arrested/roughed up by security; so that leaves ... what? Bury it in the back yard and hope no one ever finds out that you had it?

Something similar happened to me. The check arrived DHL - nothing in the envelope - just the check.
I called the number on the front of the DHL envelope. Looked up the name online. When I came back essentially empty handed. I checked out the bank the check was written from. I called the bank and explained the situation. She asked for the account number and told me she would call me back. The next day she called and told me that this was a fraudulent check and that the account number on the check was an account that had been closed in 01'. She then forwarded my call to their fraud department who asked me to mail the information with a letter explaining what had happened to me with my contact information in case the authorities had any further questions. I did just that. I had one more call a week later thanking me for checking into the situation before cashing the check and they asked if I had been asked to transfer money anywhere. Which I had not.

I don't understand this scam - they send you a check and ask for nothing?

Plus in my case the person paid for DHL.

it was $3,500.00 as well

Jerks

@testsicles:

"you will need to explain the situation to the police and hopefully you can."

i don't know what country you're posting from, but here in america we have something called the fifth amendment, which provides, among other things, the right not to incriminate oneself. this right protects the innocent as well as the guilty. we also have something called the presumption of innocence, which means that you are officially presumed innocent of crime until you're convicted, by a jury if you wish, beyond a reasonable doubt. mere possession of a dodgy check is not a crime, and generally, it is unwise to explain situations to the police unless you are the reporting party who desires them to take some sort of action.

@magic8ball: You talk to the bank, and develop a plan. Hopefully you already have a relationshiop with the bank. they can help you call the issuing bank and check the validity. If the autorities must be involved, they can be involved earlier rather than later, and may be able to use the early info to catch someone.

Why not call the FBI directly and provide them with assistance? Does your brother still have the envelope in which he received the check? Save it. Was the return address on the envelope from one of the locations your brother requested grants? Call your local FBI field office, explain to them what happened, cooperate and assist them in determining where you got the check. These things happen quite often, unfortunately, and I can assure you that you really don't have anything to worry about. The FBI does investigate a lot of bank-related fraud, so they are just doing their job. Investigation does not mean you are guilty of any crime, it just means they are trying to find out what happened. Hopefully your brother kept any documentation/evidence. The FBI will most likely ask him what happened and it will end at that.

Perhaps approaching your bank with your concerns would be a good idea. When opening up the account, they should have mentioned to the banker that they were somewhat concerned that the check may not be authentic and was there a way to certify it? I know that there is a way to check the balance on an account. However, raising a red flag early would avoid being accused of trying to pull a fast one.

@magic8ball: If you've deposited it, then you can go here to file a claim. It's a non-profit but they should be able to help out.

[secure.nclforms.org]

The basic thing is to destroy the check if you think it's suspicious.

@magic8ball: listen, IANAL, but i stand by my original statement. i can't speak for every bank - only my personal exposure (& professional opinion) on the matter. if you are unsure, bring it to the bank & discuss it with a manager. if a manager tries to have you arrested for bringing a suspected fraudulent item to their attention, then they're just an asshole.

understand that if the bank feels the item is fraudulent, they will confiscate it - be prepared for this.

if you know it to be fraudulent, destroy it. don't waste your time trying to be the good guy - the investigators are so back-logged on this crap they don't know what to do. if, despite this information, you feel the need to proceed, determine which government agency is responsible, contact them & prepare to waste at least 1-2 hours of your time answering questions & forwarding information for an investigation that is not going to go anywhere.

@the-perfect-face-for-radio: Yeah, whether you meant to or not you just explained my whole point. You have a bad check and you take it to a bank, who doesn't buy your story and calls the police. Now what? You've either got to try and explain the situation or lawyer up and go through that whole rigamarole. Who wants that? Stay away from bad checks. If it's fishy, shred it. My original advice still stands, if you take a suspicious check to a bank, be prepared to get a hassle.

@SabreDC: "Why not call the FBI directly and provide them with assistance?"

You want to voluntarily call the FBI and tell them you may have a fraudulent check? Are you some kind of weirdo?

Sadly, once you're reported to chexsystems, getting out is nearly impossible. Even when no debt exists, you'll continue to be reported for 5 years and it will hinder your brother's ability to get new accounts or possibly even keep his current one. Please have him file a police report and have him dispute the entry on his Chex report. Should that fail, he can then dispute with the bank directly. They must verify or delete within 30 days just as any other CRA.

@janetcarol: Scambaiters sometimes have scammers send fake checks in order to waste their resources. Maybe a scambaiter used your address, perhaps not knowing it was a real address?

"Opening a new account just for the check was half-smart, and all stupid. " - i think if a reader put this in a comment to the story, they'd get a warning from comment moderator roz. So with all the yelling about not blaming the consumer, you need to sort of lead by example here.

@numberoneasa: more bad news: i think it's actually 7 years (just like the major CRBs). well anyway, it's at least 5.

It seems like the OP and her brother caught on pretty early in the game that the check might be fraudulent...so why even open an account to deposit the check?

If your first thought is that it seems fishy, it probably is, and you shouldn't ignore it and acknowledge the money might just be there anyway. Your name is now associated with the chunk of fake money via a bank account. Previously, you were just a person who applied to grants and scholarships and got a possibly fake check. If the OP's brother would have talked to the bank about his suspicions, they might have been able to help determine whether the check was fake. Maybe not, but it doesn't seem like they tried.

@testsicles: Please refrain from any name calling. I'm trying to lend assistance to the OP in a field in which I have personal experience. Your comments lend nothing to the conversation and should not be permitted under the comment code. Yes, I AM suggesting that the OP contact the FBI directly. Why would the OP have anything to worry about? HE didn't create the fraudulent check, he is providing evidence to investigators to track down criminals. His call would be welcome.

If you have nothing to continue other than insults, save it.

@SabreDC: I disagree and consider it foolish to contact the FBI while in possession of a fraudulent check.