Sunday, October 25, 2009

Vocabulary Lesson - Clear

Quite a while back, I wrote a "vocabulary lesson" about cashier's checks.

I wanted to continue on this to show why I believe the wording used by the banking industry is so misleading and why it is so easy for so many people to become victims of counterfeit cashier's check scams.

So let's say you receive a cashier's check from someone and you are concerned if it is a valid check or not. You want to receive the payment you are entitled to, and you do not want to end up liable for money from a bad check. This is the case with many people who become victims of counterfeit cashier's check scams. Many of them do not know how to make sure that a check is legitimate, so they bring it to their bank. They trust that the people who work with forms of currency every day will know how to make sure that this check is legitimate.

If the bank teller tells you that "the check will be clear in 24 hours" what does that really mean, and why is that confusing to the banking customer? Let's take a look at the definition of the word clear.

free from blemishes; unhampered by restriction or limitation; unencumbered by debts or charges; free from obstruction

"clear." Merriam-Webster Online Dictionary. 2009.
Merriam-Webster Online. 25 October 2009

Banking: collection of funds on which a check is drawn, and payment of those funds to the holder of the check

"clear" Business Dictionaries from 2009.

From reading these definitions one would think that when the bank tells you that an item, such as a cashier's check, is "clear" that would mean that you are free to use that money with no worry . . . it should be unhampered by restrictions and funds should have been collected from the bank on which the check was drawn according to the definitions I found online from reliable sources. So then why is it that banking employees will tell their customers that the check is "clear" in 24 hours, but then contact them a week later to say that the check was found to be counterfeit? You cannot un-ring a bell. If it is clear one day, it should still be clear a week later.

Maybe the real problem is not the word "clear" but the fact that it takes on average 7 - 10 business days for a check to go through the entire clearing process, but many bank's train their employees to tell people that cashier's checks are "clear" in 24 hours. If it is a legitimate cashier's check, then there would be no problems since it would be drawn against funds of the bank itself, but these checks are counterfeit and they are very good counterfeits, so good that they fool bank employees and bank managers on a daily basis.

So to make the vocabulary fit the situation, wouldn't it be better for bank employees to inform their customers that "it could take over 10 days for the check to clear". I know that the bank that we are currently with does this because I asked them before I opened an account with them. Test your bank out. Go in and ask them if you brought in a cashier's check how long would it take for it to clear. If they tell you 24 hours, you might want to rethink who you are trusting with your money.

Shawn Mosch
Co-Founder of
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