Money mule (type of scam)

"john boyle" wrote

Because you said the bank wouldn't give him the paid cheque itself, for a fee or no fee!

The payee can't trust the drawer; that's the whole point of needing to know if the cheque is 'paid' or not. So the payee can't trust that any 'paid' cheque handed over from the drawer, purporting to have just been obtained from the drawee bank, is genuine (it may not be!).

Therefore, to be safe the payee needs the written proof to come from (one of) the banks - collecting or drawee, either would do.

you wouldnt go to court if it was indeed 'paid'!

In message , Tim writes

The logic is lost on me here. How can the drawer have the forged cheque if it hasnt been paid? Forged or not? Why would the drawer want to give back a forged cheque?

In message , Tumbleweed writes

Quite!

"john boyle" wrote

I didn't mean the *original* cheque that went through clearing, I meant a new piece of paper that the dodgy drawer has freshly forged (on day 2) to

**look like** it is a 'paid' cheque that has been through clearing...

You said the written evidence for the payee is the 'paid' cheque. You said this written evidence could only be obtained by the dodgy drawer, not the payee. The payee can't be sure that anything handed over from the dodgy drawer is genuine!

Suppose the payee goes to the drawer and says "please obtain the 'paid' cheque from the drawee, so I can see proof - ta." Now suppose the dodgy drawer doesn't bother contacting the drawee bank, and so doesn't obtain the true (original) cheque - which won't say "paid" anyway because it's not! The dodgy drawer simply forges a new piece of paper that looks like a 'paid' cheque, and hands that over to the payee.

Can that not happen?

In message , Tim writes

This is all getting a bit fantastic.

If the drawer can duplicate all the stamps and computer printing and thingies and if the payee doesnt know what to look for, then yes. I will be bold AND SAY I THINK I would spot it though!. But I suppose anything can be forged. Including a letter from the bank to say it is 'paid' when it isnt.

The payee neednt wait much longer though 'cos the real unpaid cheque would normally be back in his hands by day 5.

Surely the drawee *never* gives out a paid cheque because it needs to be kept as evidence. They would only give a photocopy.

But the payee can trust his banker "the collecting bank", and the collecting bank trusts the drawee.

But the collecting bank can be told by the drawee that it is paid, and can confirm this to the payee. I don't see the need for this to be in writing. Why can't the payee just walk into the collecting bank with a witness? If the collecting bank's clerk is in on the scam, a written note from him confirming that he has telephoned the drawee and spoken to clerk X on day Y at time Z an they have confirmed the cheque is paid, is not in any sense worth more than his spoken assurance to that effect.

But why is written proof needed at all? Once the deadline for late returns has passed, it is impossible for a cheque to be "not paid", if I understand JB correctly.

One thing I'm not quite happy about yet, JB, if you don't mind: You've said, I think, that an unpaid cheque would be sent by the drawee to the collecting bank by first class post. What if it's delayed or lost in transit, and so fails to get there by the next-day deadline? Do they still get sent like this or is there an additional electronic route as well? It seems to me this would be far cheaper and more reliable these days than shuffling bits of paper around. The real issue here is who can be sure of what when. If the collecting bank can be guaranteed to be advised by day 4 of any unpaid status, and if the collecting bank will move heaven and earth to make sure the payee knows of this by day 5, then presumably the payee can assume, nay *know*, by day 6, if he's heard nothing, that it *is* paid. Yes? Or does he need to ask?

In days gone by (yes, even before my time!!!!) banks used to return the cheques to the drawers with their statements automatically. Then, when computers were introduced and the statements were sent out from somewhere else they stopped it but clients could still ask for it. Then they introduced a charge and now they dont do it because the cheque is often not physically presented at the drawee but can be viewed. The roginal can be retreived though.

Yes, that is a danger. This is the reason why banks go cagey over timescales. The collector would know something was wrong though on day 6 when the drawee's claim for the return of the dosh comes in.

Yes there is.

Errr yes(ish) he can 'assume'.

Yes.

Cheques paid into my Co-op bank account appear as "available" after two working days. I assume that the Co-op bank does not clear cheques any faster than other banks, it just trusts me that I won't pay in dud cheques then withdraw the cash and disappear to South Americas

A reference to

$$tablecontents.html appeared in another newgroup. It happened in the US, but it is a good story and it is relevant to this thread.

IIRC Barclays let you have the value of the cheque, or a grand (whichever is smaller) after a day (or perhaps straight away, cant recall)

In message , s snipped-for-privacy@yahoo.com writes

Thats right.

In message , Tumbleweed writes

Yes and charge you interest for it, of course. Why Barclays make a big deal of this I dont know as most bank will do it without the £1k limit.

"Ronald Raygun" wrote

I trust my old mother completely - but I still realise that she doesn't know about certain things, and so sometimes gets answers wrong. [I've managed to learn what sort of questions she'll likely answer correctly, and what sort she'll possibly get wrong.]

So, how do you know that the person you are speaking to at the bank isn't one of those "trustworthy but untrained" bank clerks who answers the question "is it paid" incorrectly?

"Ronald Raygun" wrote

JB has already stated that if the clerk says "it is paid" *incorrectly*, then the bank isn't binded by that.

"Ronald Raygun" wrote

Although I suppose that might be a possibility, I was considering an "untrained" clerk rather than one "in on it"!

"Ronald Raygun" wrote

Exactly. As I said before:-

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.

The point of the written evidence - at a time before day 5 - would only be to "guarantee" the (future) payment, so that the payee can make arrangements knowing that the funds *will* soon appear. I agree that it appears it would be unnecessary after day 5, but the payee might want to *know* fate before that time...

"john boyle" wrote

They wouldn't need to!

"john boyle" wrote

Exactly - the common layman *wouldn't* know what to look for! But they usually trust written notifications from their own bank.

"john boyle" wrote

I would expect *you* to -- but unfortunately not the "masses" (including myself!).

"john boyle" wrote

I would trust a letter handed-over from a bank clerk in the branch, much more than anything the drawer gave - not forgetting, of course, that if you trusted the drawer as much as your bank then you wouldn't even need to ask for any proof!

"john boyle" wrote

Exactly - which is why this must be the best method (wait for day 5), rather than using 'special presentation'.

Not my problem. If the bank acts negligently, they're liable.

"Binded"? Where, Sir, did you go to school?

Has he? I must have missed it, and I'd find it difficult to believe. If the bank clerk says something and is mistaken, the bank as his employer is vicariously negligent (should have trained/supervised him properly) and liable for the consequences, I'd have thought.

"Ronald Raygun" wrote

My newsreader shows John's reply at "18/08/2005 19:31" stating simply "No" to the question: "I was thinking of the customer asking a cashier at the

*collecting* bank, and that cashier answering "is paid" - possibly without even contacting the *drawee* bank. In that situation, would the *collecting* bank be bound by the statement?"

"Ronald Raygun" wrote

That's what I would have thought, and why I would want written evidence - bank headed paper - so it shows that the clerk clearly acted as an employee of the bank.

Hmm. Written evidence isn't any stronger than oral evidence, it's simply more precise, eliminating as it does the possibility of mis-recollection by witnesses of what exactly was said. Without a witness it would be your word against his if he subsequently denied telling you that (the drawee confirmed to him that) it was paid, that's why you'd need an additional witness, preferably primed to listen out for the key words.

In any case, JB's reply to which you refer, if correct, doesn't seem to relate to strength of evidence but to a more fundamental point. I take his reply to mean that even a written statement wouldn't help you either.

By that I meant that collecting bank could not ensure the payment of the cheque. If the payee changed his position as result of the answer to the question and the cheque bounced, then I believe the payee would have an action for negligence against the collecting bank.

All the collecting banks letter would say is (after checking) 'we are informed by the drawee that your damned cheque that youve been going on about is bloody well paid. Sir. '