A "cleared" check can still bounce - even after 3 years - if it does YOU are liable, not t

Pushkin

An article in today's Washington Post describes how you can be scammed by your bank telling you that a check has cleared and the money is in your account. "Cleared" in bank terminology does not mean "good".

If your bank deposits funds into your account after the "hold" period and the check later (days, weeks, months) turns out to be bad YOU lose, not your bank. Banking laws do not protect you, they protect the banks.


See today's Washington Post www.washingtonpost.com or go to this link. Cleared checks may not be good & you lose!

RKKay

That's outrageous, especially with the way they use the float.

Whitby

Actually, the laws protect you. Assets in the context of banking refer to the money it loans. The bank does not make money by the sheer fact that you have deposited money. (on a related note as far as laws that protect you), FDIC is a gem when it comes to insuring accounts. While the law has a limit of 100 grand, it is almost a custom to go above that in certain situations. So, not to sound negative, but, without those pesky laws, banking in this country would be a disaster. This is not to say that its a rose garden or the definition of perfection.

mrearlygold

joeyuk

I have had this happen with a payroll check just a couple monthe ago. The bank said they made the funds available to me the next day as a courtesy. Their policy is to attempt to deposit it. Wait a day and attempt again. Then mail the check back to me the depositor. In all it took 2 weeks to straighten out and would have been worse had I not covered the check with funds from another account.

pf70collector

U.S. Postal Money Orders may be the only way to go if you are selling on ebay. If you are not a frequent seller that is.

SanctionII

Many persons probably do not know this, but when you endorse a check by placing your name on the back of it, you are taking on personal responsibility and liability to all persons downstream from you who accept the check (i.e. your bank when you deposit it).

Thus for example. Joe Blow writes you a personal check for $1,000,000.00 on his account at his bank and gives it to you. You take the check to your bank and present it for deposit. Your bank will require that you endorse the check by writing your name on the back of it. You are Bill Gates and have $1 Billion dollars in cash sitting in an account at your bank. Your bank will take the check from Joe Blow that you have endorsed and credit your account for the amount of the check and makes that money available to you after the hold period. Your bank routes the check through the banking system to Joe Blows bank for presentation and payment. Joe Blow's bank goes belly up (Chapter 7) one hour before the check is presented and the president of the bank yesterday left with his 20 year old secretary for a tropical island that has no extradition treaty with the USA, taking with him all of the bank's deposits, including the $1,000,000 from Joe Blow's account. Joe Blow is broke since he is a burger flipper and since the $1,000,000 that was in his account was his lotto winnings.

Your bank is holding the bag since the $1,000,000 check you endorsed and deposited has not been honored by the bank on which it is drawn. Does your bank take a loss? No. It sues you to recoup its loss because you, by endorsing the check, essentially guaranteed your bank that if it does not clear, you will hold the bank harmless from all loss.

kryptonitecomics

One of the only time I ever got burnt in 7 years on Ebay was due to getting a check for just over $100 dollars for a couple of basketball rookie cards. After 10-days of holding the items my bank showed the check was cleared so I shipped the cards. A month later my bank told me the check bounced and I was $100 bucks lighter in my bank account........needless to say I was not amused and was never able to recoup the hundred dollars

ABC123

Moral to the story, and the Washington Post article---only accept checks drawn on a US Bank, ----accept foreign checks at your own peril !

SUPERCARCOINS

...How doe`s a check become bad after months ???

bigMACnoCheese

If it's a national bank.. walk it to that bank and get the cash.. then your off the hook.

I believe you can also call the bank the check is drawn on and ask them if there are funds available and ask them to put a hold on those funds in reference to the check in hand..


anyone ever do this... I know someone who ran a small business and did this all the time before delivering the product.
It's been awhile since those days.. can this still be done?

Dave99B

This is PayPal's fault.

Dave

Russ

<< <i>I believe you can also call the bank the check is drawn on and ask them if there are funds available and ask them to put a hold on those funds in reference to the check in hand. >>



Most larger banks will no longer do this. They will tell you only if the account exists and is open. In addition, some banks that still provide funds verification do so with a 900 number and charge a fee.

Russ, NCNE