Federal banking regulations generally require that funds deposited with a cashier’s check be made available to the customer the next business day, but this doesn’t mean the check has cleared. It could take anywhere from seven to 10 days from the time a check is deposited for it to be returned back to the bank as unpaid. Because of this, unsuspecting consumers are an easy target for fraudulent cashier’s check schemes.
In Boston, an elderly woman received a letter stating she’d won $250,000. After calling for details, she was instructed to deposit the enclosed cashier’s check for $4,975 in her bank account and told to wire back the sender $2,700 to cover taxes on the winnings. They said they would send her the remainder of the winnings when they received her payment.
When the bank made her funds available three days after her deposit, the woman withdrew $3,500 and sent a $2,700 Money-Gram to the Canadian location. A few days later, her bank informed her the check she’d deposited was fraudulent, and she owed them the money she withdrew.
The Massachusetts Consumers’ Coalition wants to stop these schemes and is working with banking officials and federal regulators based in New England to encourage more consumer education. They want bank personnel to clearly explain to their customers that checks could take up to 10 days to clear. The MCC warns that these scams can take place by mail, through eBay transactions or other Internet-based, long-distance sales.
Remembering to be cautious will help people avoid becoming the victim of a cashier’s check scheme. If you or your bank has suspicions about a check, you should call the issuing bank to confirm the check is legitimate.
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