Money mule (type of scam)

"john boyle" wrote

Unless a court would accept that, then it's not good enough though is it? I'd expect *evidence* to be required, eg in the situation of the payee taking the collecting bank to court after the cheque had been reversed?

"john boyle" wrote

That's all well and good, but it might as well *not* have been 'paid', because (from your earlier comments):- (1) The bank won't give written evidence to the payee that the cheque is indeed 'paid'; and (2) If the collecting bank's clerk says "yes it is paid" when it is not, the collecting bank won't be held to this.

"john boyle" wrote

Are you disputing that this can happen?

"john boyle" wrote

But:- (1) How can the payee be *sure* it is 'paid'? (2) How does (s)he obtain written proof?

In message , Tim writes

The evidence is the cheque itself duly cancelled and marked 'poid'

Youve lost me here. Why should a collecting bank accept a returned cheque after the time limits set by the clearing system? The rules for 'late returns' are well established.

Now you are getting things a tiny bit out of hand. You are confusing hearsay evidence form a third party with the avctual situation. Once a cheque is 'paid' then it is paid, what somebody else says or does isnt relevant.

Yes, with the exception of the circumstances that I have already described in which the various parties to the cheque were in league .

In message , Tim writes

(How many times) by asking the collecting bank to enquire of the drawee.

Ask the drawer to provide it.

In message , Peter Saxton writes

Anecdotally, I would guesstimate that I've had about 90 deliveries from Viking, over about a dozen years, I can think of two which failed to arrive next day.

Just verbal 'say-so' isn't good enough though - we need it in writing, for possible subsequent production!

"john boyle" wrote

But the drawer can't be trusted. They're the one trying to scam the payee! So, the drawer could obtain the (unpaid) cheque from the drawee bank, then "doctor" it to look 'paid' (especially to the layman), then show it to the payee as 'paid'...

"john boyle" wrote

... which the payee can't obtain from an 'official' source -- only from the drawer of the cheque who has an incentive to forge it to look 'paid'... Can you see the problem?

"john boyle" wrote

If the cheque "clears" on day 3, but is then found to be fraudulent on day

4, it *can* be reversed - can't it? [After all, that's the method the scammers use, isn't it?]

So - if the bank *had* said "it is paid" at the end of day 3 (obviously in error), although it was then reversed the next day, what can the payee do about it? Without written evidence that the bank *did* say it was 'paid', what do you think a court would do?

"john boyle" wrote

Perhaps this is what we are missing. What *are* those rules - can you summarise them for us?

"john boyle" wrote

Accepted - but I'm just trying to discover how the payee could possibly get reliable evidence that the cheque *has* been 'paid' - so far, all you've said suggests that is impossible.

"john boyle" wrote

So when *is* the "cut-off" point? Three days? Four days? A week?

According to the classic scam, the cheque can be reversed the day after it "clears" :- (1) Cheque clears; (2) Payee transfers excess funds to drawer [Eg 50 item was paid with 500 cheque]; (3) Cheque is reversed. Or are you saying that the above chronology is impossible?

In message , Tim writes

Only if you are desperately looking for one. . If there is dispute then the cheque can be produced.

We are back to the misuse of the word 'clear'. I havent ever said a cheque 'clears on day 3'. Day three is the day it is presented (electronically these days) to the drawee. The drawee has until noon the next day to bounce it.

What do you mean by 'fraudulent'. Forged signature?

If you mean 'crossfirers' then yes.

If it was the drawee who said 'paid' then get the collecting bank to refuse to accept the returned cheque. Simple. I have refused to accept late returns on a number of occasions when I have relied on the payment of the returned item when advancing dosh to the payee.

If a collecting bank enquires as to fate then a record of the time of the phone call and the individuals name is kept. It would then be a matter of judgement in the court based on all the facts.

I have often seen drawees try it on with a late return but I have never seen one go to court.

But having said all of this, in the circs I describe we are talking about a cheque being bounced no later than noon on day 4. This is quite allowable in the clearing house rules. I have never known a cheque be returned any later than day 4 and in all these cases the answer on the cheques were 'refer to drawewr' (sometimes with a request to represent).

The question of a 'fraudulent cheque' intrigues me. What does it mean?

I have referred to them above and another poster has already done so, but here we go.

Day 3 Cheque is presented for payment at Drawee. As a cheque is payable on demand the drawee must decide by close of business if the cheque is paid or not. IT can defer its decision until the end of the day but if fate is requsted during the day the drawee can say 'call back after

3.30pm) but if the clerk says the cheque IS paid then that is irrevocable. That si why there is so much responsibility involved when a bank clerk 'cancels' or 'pays' a cheque. In most clearing banks this is a personal liability and a c*ck up can mean dismissal.

I once paid a stopped cheque by mistake. It was for a bout £25k worth of wholesale carpets. In 1976 this was a lot of dosh. In was in the deep stuff. Luckily there was no dispute between drawer and payee and the payee authorised the collecting bank to accept the return late. This proves the point that banks just cant accept returned cheques willy nilly..

No. It was more commonly seen as a number of parties all writing cheques to one another all creating large credit ledger balance but with nil cleared balances. On day 4 one of them withdraws the credit balance. Its called 'crossfiring'. Bank clerks were always told to be on the look out for it.

In message , Tim writes

Not possible. If the cheque was unpaid it would be on its way back to the collecting bank. It would lie there 'unpaid'

In message , Tim writes

Sorry, in my other reply to this post I started to answer this then got side-tracked.

I will start again.

Day 3 Cheque represented for payment at Drawee. Drawee must say if paid or not. Can defer decision till 3.30. If not paid the item returned by

1st class post to collecting bank. If advice of a cheque being 'paid' is given then the drawee is stuck with it. I have known a decision to bounce a cheque being subsequently reversed during the day but as that didnt hurt anybody all parties were happy.

Day 4. If 'due to an oversight '(whatever that is)! And NOT for a technical irregularity the drawee can bounce the item but if it is in excess of what used to be £500 they must telephone the collecting bank by NOON and ask them to accept the cheque as a 'late return'

Day >= 5. Too late.

In message , john boyle writes

That should read ' It wouldnt lie there 'unpaid''

"john boyle" wrote

Problem is, the payee can't be sure that the drawee *has* said "it is paid" - they have to rely on the collecting bank to ask the drawee, and even if the collecting bank does say (verbally) that it is paid, that isn't good enough apparently. Written evidence is so much more convincing!

"john boyle" wrote

So why can't those details be given to the payee (in writing), as evidence ?

"john boyle" wrote

OK, so it looks like this is the only method the payee can be sure the cheque is paid - by waiting until day 5.

From what you've said, "special presentation" will never be worth the fee - because the payee still won't receive proper *evidence* that the cheque is 'paid' (ie evidence that could be relied on in court). Better to always wait for day 5 instead. Understood!

In message , Tim writes

In message , Tim writes

NO! Special presentation will enable the drawee to stamp the cheque 'paid', cancel it and utter an irrevocable statement of fate a day earlier!

It wont "clear" any sooner of course.............. :-)

Hmmm........

"john boyle" wrote

But where's the evidence for the payee that this has happened? Without proof, it might as well not have happened!

- You've already stated that the payee can't enquire on the drawee of fate (crossed cheque - only a bank can enquire).

- You've already stated that bank clerks aren't trained properly nowadays(!).

- You've already stated that if an (untrained) collecting bank clerk utters "it is paid" when in fact it isn't, then the bank won't be held by that statement.

So where does that leave the payee?

Suppose I deposit a cheque, asking for 'special presentation' and pay the fee. When can I be *sure* that the cheque *is* indeed paid - with undeniable evidence that I could produce in court & would stand up in the court?

"john boyle" wrote

That's no excuse.

The payee could easily be charged a fee for receiving this evidence - just like customers are charged for many other bank services. Then it's up to the payee to decide whether they want to pay the fee, to get the evidence.

In message , Tim writes

Thats my point.

But why should the payee agree to the fee if he wont agree to obtain the paid cheque itself? Or did you really mean 'fine' not 'fee'?

In message , Tim writes

The next day and the actual paid cheque. If you are going to court over it the court would issue an order that the paid cheque be produced.