Sunday, July 26, 2009

Scams and the bank's part

I would like to share with you a problem in our banking system that needs to be addressed in order to protect all banking customers.

It starts when people from overseas posing as potential buyers of large items for sale on the internet, such as cars, ask the seller of the item if they can have an associate of theirs in the United States mail them a cashier’s check for the amount of the item plus transportation overseas in order to expedite the process. They ask that once the check has cleared the bank, the seller withdraw the amount that is for transportation, and wire it to the buyer so he can schedule the shipment of the item.

When these cashier’s checks are deposited into the accounts of the sellers and they ask their banks to verify for them when the check will be clear and good, so that they can safely remove the funds needed, they are not given accurate information by the banks. Some are told that the check will be good in 24 hours, and some are told that the check is guaranteed good, so they should have no worries about the using the funds. Feeling safely assured the bank customer goes through with the transaction. Then, days later, when the checks are found to be counterfeit the banks are holding their customer responsible for the entire amount of the check, even though the bank had already assured them that the funds were good.

This is exactly what happened to my husband and myself in October 2002. We found out quickly that there was very little information that could help victims of these scams, so we decided to begin our own website,, in order to spread the word about this scam and help to save others from going through what we went through. While our efforts have helped stop over $2 million in the first two years of operation, so much more could be done if the banking industry would take more responsibility for actually verifying these cashier’s checks before the money is released to the customers.

It has been our dream and our mission to find a way to compel our government and legal system to take measures to help protect banking customers from this type of unfair and deceptive business practice. The banking system is failing to verify these checks and allowing counterfeit cashier’s checks to pass into the system which impedes the national interest of the United States because it finances crime, undermines the integrity of the international financial system, impedes the international fight against corruption and drug trafficking, terrorism and distorts economics. United States banks are frequently used by other countries to receive large funds from unsuspecting Americans because the banks often fail to screen, monitor and check the transactions for their customers.

We are asking that the customer protection laws governing banks and the check clearance/settlement system include the following:

- Assure full disclosure of the true time period for check clearance to the customer
- Prohibit the use of funds until a check been verified against the ledger at the issuing bank and the check has been honored
- Hold financial institutions liable for any monetary loss due to the customers reliance on false of misleading statements by financial institutions
- Mandatory holding periods on all checks of a substantial amount
- If a customer would like to access the money before the time that the bank has verified and honored the check, requiring them to sign an agreement that makes it clear that they are liable for the money of the check comes back as counterfeit.

These items will help to ensure good business practices, customer financial safety, and reduce the use of counterfeit checks as a means of fraud. If financial institutions understand that they will be help totally liable for any monetary losses due to false or misleading statements or neglect to follow the above described check clearing and verification process the financial institutions will take measures to protect themselves from this type of loss, thus protecting the customer, the financial system, and reducing the criminal activity of producing counterfeit cashier’s checks. Our financial institutions are our last defense against this type of fraud, so it is important that these customer protection laws be created to ensure that they are working with and for their customers in order to reduce such activity.

We hope that you will agree with us that the banking industry is misleading it’s customers when they do not fully disclose the time that it will take for a cashier’s check to be verified as legitimate, or when the assure a customer that a check has cleared only to hold that same customer liable when they find out later that they were wrong. We hope that you can assist us, and all other victims of theses scams, by launching the legal battle to change the way the banking industry handles the verification process of cashier’s checks.

Shawn Mosch
Co-Founder of
There is strength in numbers!

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