Money mule (type of scam)

In message , Peter Saxton writes

No. A cheque is payable on demand.

In message , Tim writes

It means that a normal BACS payment takes 2 days to get there. In this case 'automated payments' means BACS transfers, such as standing order, and Internet banking stuff.

John, just to clarify, will asking 'is it paid' involve the bank contacting the originator (via the originating bank I suppose as the recieving bank wouldnt know the details)? Or might they take a chance depending upon the value (and in effect then agree to carry the risk of it subsequently being fraudulent?)

In either case, do you think bank staff are generally aware of this? Mine (Barclays) didnt suggest it as an option when I asked them a few weeks ago about a cheque. I'm presuming its a high cost option for them so making it well known this facility exists wouldnt necessarily be a 'good thing'.

John, how does that statement equate with this from APACS (not the BBC :-);

"Be aware that, even after the value of the cheque has been credited to your account, there is a small risk that the money could be reclaimed IF the cheque subsequently turns out to be stolen or counterfeit. "

from here

In message , Tumbleweed writes

I am familiar with that link.

My post was based on two points,

the first being the journalistic exaggeration of the BBC which seems to apply that the threat of reversal is a potential threat to every cheque acceptor.

The second is that in those cases in which such a transaction has occurred the circumstances have been very substantially different from the usual cheque transactions which one normally sees. This involves a predetermined sequence of fraudulent transactions in which almost all the parties, expect the collecting and drawee banks, and very very occasionally an innocent holder of the cheque, being not the payee and not a holder for value or a holder in due course, are a party to the fraud. The rate of occurrence is of minuscule significance.

In message , Tumbleweed writes

I dont know what you mean by 'originator'. If you mean 'drawer' i.e. the person upon whose account it is drawn, then the answer is no. If you mean 'drawee' i.e. the bank upon which it is drawn then the answer is 'yes'. In both cases I assume your use of the word 'bank' means the collecting bank., i.e. the one at which the cheque was paid in.'

You are right. It isnt a 'profit centre'. Teaching cashiers about it would take at least 10 or even 11 minutes in training time and it isnt considered to be worth the expense.

What about a 'straightforward' case of a stolen cheque book whose loss has not been noticed by the owner, and wont be until, lets say a few months later when the quarterly bank statement occurs. Lets say that in this case, the drawee bank tells the drawing bank 'this looks ok' (which I'm presuming is the practical effect of what asking if its 'paid' means).

In that case, when the fraud is discovered, does the money get reversed out of the persons account who received the cheque, or does the drawee bank accept the loss? If the latter, its a pity that APACS dont make this facility better known since by omission from that document, they are close to washing their hands of the responsibility.

"john boyle" wrote

I thought so - so is it true that those can't be reversed, then?

"john boyle" wrote

So if ( /when?! ) a cashier blurts out "yes, it *is* paid!" when asked by a customer -- not knowing what that really means -- can the bank go back on it? Do you perhaps need the answer "it's paid" in *writing* from the bank? [I'm wondering if they'd charge a "letter" fee for this!]

I meant by a bank.

In message , Peter Saxton writes

I know, only a bank can pay a cheque, and once it is 'paid' that is it.

In message , Tim writes

Ahh, well thats another story! ' DDs & Sos are put into the system in advance and they can be 'recalled' up to the day that the credit or debit hits the recipient account but most private individuals cant do this.

In general, once a BACS payment has been made, then thats it, but there is a theory that if somebody in a bank makes an error and puts the dosh in the wrong account by mistake and then realises it they could reverse it out, but a private individual who input the wrong account number on his PC wouldnt be able to do that.

In message , Tim writes

In the good old days... (pauses while R.Raygun falls off his seat in laughter) .... once a cashier had said the words 'paid' that was it. Irrevocable. Which is why you should ALWAYS get the cashiers name. That was why cashiers needed a few years experience 'round the back' and were sent on two week residential courses (no joke) before they were allowed on the counter. By 'paying' a cheque, or 'cancelling' it as some banks called it, the 'canceller' was using the authority of the bank to formally 'pay' the cheque by applying a rubber stamp and cancelling the signature thereon by initialling through it. The canceller was personally responsible for this. A c*ck up here was a sacking offence.

As a collecting banker I have personally goaded an inexperienced clerk answering the phone at a drawee into saying the words 'yes, its paid' then getting their name quickly, so as to ensure a cheque was paid when perhaps there was a chance it wouldnt.

If the cheque was crossed then the drawee should only tell another banker if the cheque is paid. A canceller could delay their decision until; 3.30 pm if they so chose without giving a reason.

If they could yes, undoubtedly!!!

What is the best practical means to ensure there isn't a problem with a cheque?

Should I have a form that I complete for each banking and get my bank to sign and confirm for every cheque when it is "paid"?

In message , Peter Saxton writes

If its within the scope of the scheme, ask for a cheque guarantee card. Otherwise, three days after paying it in get the collecting bank to phone the drawee to enquire as to fate.

No. There isnt one and a bank wouldnt do it any way.

"Jonathan Bryce" wrote

-- BUT --

"john boyle" wrote

Jonathan - any reason why you said that a wire-transfer (by a private individual) *could* be reversed? [Or were you answering a different question?!]

Mainly because I've seen it happen.

In this particular case, it was a reversal of a bank error, but as far as I'm aware, it could happen in cases of fraud as well.

Its a big logic jump from this ....

To this......

I'm not very good at the long jump at the best of times.. :-)