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Some fake checks look real so that you can cash them unknowingly. Meanwhile, this article explains what happens when you cash a fake check without knowing it.
A friend sold a motorcycle on Craigslist for $1,500, and the buyer preferred to pay with a check. The buyer mailed a $2,500 check and claimed it was a mistake by his assistant. He asked my friend to resend $2,000 and keep $200 for his troubles that a shipping company will pick it up.
The friend cashed the check at mobile deposit, and the bank cleared the transaction within 24 hours. After some days, the shipping company is yet to arrive, and my friend thinks it’s just one of the delaying days. About a week after, the bank informs him that the deposited check bounced and reversed the entire $2,500.
Then the friend finds out that the classified Craigslist scam was used on him, and the bank says they can’t help. Now, he had cashed a fake check, and the bank says he is responsible for repaying them. The problem now is what happens since he cashed the phony check, which I disclose in this article.
What Happens If You Cash Fake Check Without Knowing It?
It is fraud to cash a fake check, and the consequence may be severe depending on your jurisdiction. However, since you cashed a fake check without knowing it, you may be able to escape the mess it gives your identity.
If you sit back and feel it ends at the bank retrieving the funds, it might be too late to claim that the mistake was honest.
The first thing that happens if you cash a fake check is that the bank charges it from your account. They may inform you that the check bounced, but this occurs some days after since the bank must confirm the transaction. Secondly, your information is sent to ChexSystems for fraud.
When you are registered in ChexSystems, it is similar to filing for bankruptcy. Most of the time, the consequence is worse because you can’t apply and get loan approval, request a credit card, or open a new bank account. If you cash your payroll, such as income taxes, at centers that cash checks for a fee, it will be rejected.
Meanwhile, if the person or business you cashed the fake check takes legal actions against you, it becomes a mess. Like I mentioned earlier, cashing a fake check is a criminal offense and fraudulent and is treated seriously.
How Does Check Clearing Work?
When a check is cleared, it does not mean it is OK; “cleared” is when the bank okays the fund disbursement. In most cases, the availability of funds factors in the duration for a check to go through the clearing system to get the money.
Check clearing is a mere estimate, and banks typically do not monitor checks to know when the money is obtained.
A bank typically estimates the duration fund clearance will take, subject to state law, and remove the hold in the end.
Understand that banks are unaware when a good check clears; however, they are notified when bad checks bounce. The bank may then take the money back or sue you for the money if the bank account is closed.
What to Do When You Find Out that You Cashed a Fake Check
When you find out that you cashed a fake check, your best shot is to return the money received for the bad check. Explain to the business or bank that it was an oversight on your part or an honest mistake.
If you can fix the mistake while there is time, the business or person that cashed the fake check will cooperate.
Alternatively, you may contact the FBI or any authorities. You can also inform the police, but it may be difficult to trace the person, especially if it was an intentional scam. But if you know or can contact the person, collect the funds from them.
The buyer/person issuing you a fake check commits a felony, and you can also report the transaction to the FTC Federal Trade Commission. A lawyer might be helpful; I recommend consulting a local attorney.
How long does it take for a bank to realize a fake check?
The law mandates banks to deposit available funds sooner, typically within two business days. When the money is deposited in your bank account, it is cleared but that does not mean the check is good. Fake checks are cleared likewise, but it may take some weeks for the bad check to bounce.
When you cash or deposit a fake/bad check someone writes you at the bank, it is criminal, and you will be penalized, even if you’re unaware.
The bank will charge a fee for the bounced check, which typically takes some days to reflect.
Note that regardless of whether you know it is a fake check or not, you are liable or responsible for it. And when a fake check makes your bank account negative, it is your responsibility to make it positive.
Typically, when someone writes me a check, I cash it at their bank. In this regard, I do not take chances that the check may bounce and mess up my identity and bank account.
Ultimately, receiving a fake check is a typical classified scam to look out for, especially on platforms like Craigslist. Always follow the security recommendations of any platform you use to transact and follow secure payment gateways.
Meanwhile, you can always cash a fake check at Walmart.