Help Please - Bank Trouble!

Irjudge1

My brother recently placed an add on the internet selling goods for €1600.

He was contacted by e-mail by somebody interested and agreed the price and agreed to forward the goods to the guy on receipt of a cheque and the cheque having cleared.


My brother received a cheque for €4,000 i.e. €2,400 in excess of the agreed price. The guy asked that the balance be Western Unioned back. Yes I know WHAT WAS HE THINKING. But to be fair he asked around and nobody could see an angle. The thinking being that once the cheque cleared that he would forward the goods and western union the money no harm done.

He then went to the bank and lodged the cheque. He then got an e-mail from the purchaser saying that he had changed his mind and could he send full amount back and that he did not want the goods that he had got a better deal elsewhere.

My brother said no way hosé he could either have the goods and the balance that was the agreement.

So here's the problem. He went to the bank and withdrew the €2400 (the cheque having cleared) and sent on the €2400 by western union.

A week later he gets a phone call from the bank saying that the cheque was from a stolen cheque book and that the bank were going to debit €4000 from his account. They also kindly offered him a loan which he could repay over five years to clear his account.

Now my take on this is that he withdrew the money from the bank under the assumption that the cheque had cleared so the loss should be the banks problem. Am I wrong? Where does he stand? Advice from anybody with a similar experience or professional knowlegde would be greatly appreciated.

He has been onto the Gardaí and we will be on to the financial services regulator.

BuffyBot

It's a well known, old scam. And yes, he does hold some responsibility. Cheques can be can be cancelled after they have "cleared".

stepbar

So what did your brother do with the 4 grand?

Irjudge1

He cleared a previous debt of €1600 to a third party and he western unioned the €2400 back to the guy who issued the cheque in the first place.

stepbar

Well in any event your brother holds all the responsibility. So i'm afraid its an expensive lesson. The bank is not at fault for your brother's stupidity. If your brother is prepared to accept a cheque from someone at the back of beyond, its up to him to make damm sure that person is good for the money.

Irjudge1

stepbar wrote:

Well in any event your brother holds all the responsibility. So i'm afraid its an expensive lesson. The bank is not at fault for your brother's stupidity. If your brother is prepared to accept a cheque from someone at the back of beyond, its up to him to make damm sure that person is good for the money.

Thankfully the Financial Services regulator has advised him differently. The methodology of making sure that the person was good for the money was by lodging it with a reputable bank who have the ways and means of confirming whether the cheque is good. They obviously believed the foreign cheque was acceptable after a week of it being lodged and saw fit to credit the money to his account and allow him to withdraw it. If the bank had not accepted the cheque the matter would not have gone any further. He would not have wired the money back and he would no be at loss. I don't see why the bank should be exempt from loss just because they can access his account and debit money from it without his permission.

If I was in receipt of bad cheque and cashed it I do not have the right to simply go to the house of the person who issued it and remove money or goods to cover my loss. So why should the bank?

r3nu4l

Irjudge1 wrote:

Thankfully the Financial Services regulator has advised him differently.

Can you tell us what they said to him? It would be interesting to know.

In fairness, this scam has been going around for years. In fact probably so long that many people have forgotten about it thanks to the focus on phising scams! Ah, the good old regular conman, good to see they're still around and haven't been done away with by the internet conman :rolleyes:

Irjudge1

I spoke with the FSR office myself on his behalf and have been advised that he should write directly to the banks complaints department on th ebasis that he lodged the cheque and waited for permission from the bank to withdraw funds. The failure of the banks clearing process to validate the cheque has resulted in a loss to my brother.

Now we have been advised that the bank are unlikely to accept this, but that there is a case for appeal to the ombudsman.

What gets to me as outlined above is that banks can just withdraw funds without a by your leave. I'm sure the bank can pursue a legal route with passing on of bad cheques but that is a different matter. My brother has reported the issue to the Gardaí.

Sangre

If the bank can avoid liability for this I think its a joke. They cleared the cheque so they should hold the blame. Sure, why do we wait 5 days for it to clear if they can just take the money back anyway?

stepbar

Irjudge1 wrote:

I spoke with the FSR office myself on his behalf and have been advised that he should write directly to the banks complaints department on th ebasis that he lodged the cheque and waited for permission from the bank to withdraw funds. The failure of the banks clearing process to validate the cheque has resulted in a loss to my brother.

Now we have been advised that the bank are unlikely to accept this, but that there is a case for appeal to the ombudsman.

What gets to me as outlined above is that banks can just withdraw funds without a by your leave. I'm sure the bank can pursue a legal route with passing on of bad cheques but that is a different matter. My brother has reported the issue to the Gardaí.

The failure of the other bank to validate the cheque, thats were the problem lies. The problem is not with the Irish bank. The Irish bank sent off the cheque to be cleared and the other bank deemed it to be ok. Anyhow what in ainm dea was your brother doing accepting a cheque from a) a person he didnt know and b) for a price that was nearly 3 times the asking price? I mean is he mad or what? Did it not ring some sort of alarm bell in his mind? or was he just being greedy?

fintan

Its one of the oldest scams in the book.

There is no chance the bank will let him away with the 4k, if they did whats to stop every Tom, Dick & Harry doing the same thin with their own bank account and making a fortune?

unclebill98

ok,

firstly the bank has no onus on paying back your brother. He is simply out of pocket for being so stupid.

The banks internal system for lodging a foreign chq (I assume its a non euro chq or a euro chq drawn on a foreign bank) means that one the bank has to make sure that the account the money is going into is sound. Also, most banks will only lodge a foreign chq for one there own customers, meaning they'd forward it onto the account holding branch to let them decide about it. The a/c holding branch then decide either to lodge it or send it on collection. The collection method means sending it to the bank on the chq to confirm its sound and then they send back either a "Refer to drawer" ie its bounced or a payment that the Irish bank that they can in turn use as 100% defo that its ok and then credit your bro's account.

So, they obiously lodged it thinking your bro's account is sound. It can and this is for real....take up to 6 weeks for a non irish chq to fully clear!! but the thing is that the banks lodgement process for lodging non irish chq's means that the funds are 100% clear. Meaning that you can 1 min after lodging it go out to the ATM and start taking it out. So thats why the bank always has to think "How do i get my money back if this chq gets unpaid". The t & c of his account allow the bank to take money out of your account for an unpaid chq.

That process is that the man whoms chq book was stolens bank send a db back to the your bro's bank and the db your bro and cr themselves. Your brother has the money, but in this case he has sent it off to some lucky person whom is laughing at you bros expense.

There was no failure of the other bank as they did send the it back as a stolen chq. Its just takes longer (6 Weeks) for foreign banks to process these things.

A euro chq has in theory a 6 day clearing process.

Overall, the banks is not going to let 4k go away, its as simple as this. Theres a person sitting in that branch and one of the accounts he/she looks after is missing 4k. They'd be getting emails telling them to sort out that account(most of the time they only have till close of business the following day to do so) and they'll spare no though in db your bro's account to sort there account out so they can go home and not get any more **** from up above.....

I feel sorry for your bro, but twas a good aul fashion scam....

Its all in the small print of the banks account t & c's.......

TheDriver

If its too good to be true........................... In hindsight, he should have sent cheque back and asked for the proper amount.
Though the question is true on that clearing a cheque should mean cleared and not anything else, your bro went through the procedure for clearing and shouldn't be held liable at that stage.

Irjudge1

stepbar wrote:

Anyhow what in ainm dea was your brother doing accepting a cheque from a) a person he didnt know and b) for a price that was nearly 3 times the asking price? I mean is he mad or what? Did it not ring some sort of alarm bell in his mind? or was he just being greedy?

Yes as outlined above it did set alarm bells ringing. The whole point being that he accepted the cheque and to confirm the cheque was good he lodged it in his account and waited until the bank saw fit to issue funds to him. Now if he was greedy he wouldn't have lost a penny as he wouldn't have wired the "change" back.

He has lodged cheques before and has had to wait until the cheque has "cleared" before he could access the money. He was suspicious of course but he did not set out to defraud the bank. He does not have at his disposal any other way of confirming whether the cheque was good other than lodging it and waiting to see if he cleared.

Irjudge1

unclebill98 wrote:

ok,

firstly the bank has no onus on paying back your brother. He is simply out of pocket for being so stupid.

The banks internal system for lodging a foreign chq (I assume its a non euro chq or a euro chq drawn on a foreign bank) means that one the bank has to make sure that the account the money is going into is sound. Also, most banks will only lodge a foreign chq for one there own customers, meaning they'd forward it onto the account holding branch to let them decide about it. The a/c holding branch then decide either to lodge it or send it on collection. The collection method means sending it to the bank on the chq to confirm its sound and then they send back either a "Refer to drawer" ie its bounced or a payment that the Irish bank that they can in turn use as 100% defo that its ok and then credit your bro's account.

So, they obiously lodged it thinking your bro's account is sound. It can and this is for real....take up to 6 weeks for a non irish chq to fully clear!! but the thing is that the banks lodgement process for lodging non irish chq's means that the funds are 100% clear. Meaning that you can 1 min after lodging it go out to the ATM and start taking it out. So thats why the bank always has to think "How do i get my money back if this chq gets unpaid". The t & c of his account allow the bank to take money out of your account for an unpaid chq.

That process is that the man whoms chq book was stolens bank send a db back to the your bro's bank and the db your bro and cr themselves. Your brother has the money, but in this case he has sent it off to some lucky person whom is laughing at you bros expense.

There was no failure of the other bank as they did send the it back as a stolen chq. Its just takes longer (6 Weeks) for foreign banks to process these things.

A euro chq has in theory a 6 day clearing process.

Overall, the banks is not going to let 4k go away, its as simple as this. Theres a person sitting in that branch and one of the accounts he/she looks after is missing 4k. They'd be getting emails telling them to sort out that account(most of the time they only have till close of business the following day to do so) and they'll spare no though in db your bro's account to sort there account out so they can go home and not get any more **** from up above.....

I feel sorry for your bro, but twas a good aul fashion scam....

Its all in the small print of the banks account t & c's.......

I've just checked the terms and conditions of the account and it clearly states that the proceeds of any cheque lodged to the account cannot be withdrawn until the cheque has cleared.

My brother was in with two detectives in the local garda station and their comment was that this had happened quite a lot with the branch in question. I'll let you know what happens.

unclebill98

Well I guess the bank is guilty of not telling him the waiting period for them sort of chq's to clear is. If he asked them had it cleared and if they asked what was it he lodged and he told them he should have been told then. But the really horrible part is that theres nothing he can do even if the teller told him the wrong thing its highly unlikely the bank will give him back the money.....

The Driver: The thing is he did not wait the full time for the chq to clear. It appears cleared because of they process for lodging non irish chqs, but it can still be returned unpaid. Same as if you took an AIB chq and lodged it into BOI, after 3 days the banks systems would show it clear, in some banks after 2 days even though it can still be returned unpaid up to six days later...and they'll db your account if the moneys there or not.

Irjudge1, was it a non irish chq?

The issue there is the clearance time..... 6 days to 6 weeks depending on the chq and the fact he was not told properly the clearance time....

But he aint got no comeback regardless.....I love the whole, well we'll give you a loan, that had to take the biscuit...

unclebill98

I've just checked the terms and conditions of the account and it clearly states that the proceeds of any cheque lodged to the account cannot be withdrawn until the cheque has cleared.

Well thats true, but...... Like i said. It would appear cleared even though its not and he might have gone to a differant teller, asked was that lodgement cleared, told yes it has and he took the money....

such a horrible situation....

Irjudge1

[QUOTE=
Irjudge1, was it a non irish chq?
QUOTE]

Cheque was from a subsidiary of the Royal Bank of Scotland in the UK.

unclebill98

Irjudge1 wrote:

[QUOTE=
Irjudge1, was it a non irish chq?
QUOTE]

Cheque was from a subsidiary of the Royal Bank of Scotland in the UK.

Shi*....Lets know how it goes.....

Irjudge1

Just an update.

Further to a phonecall by the Detective Gardaí to the bank €2,400 has been to my brothers account.:D

r3nu4l

Good result! Nice to hear a success story