Any advice how NOT to get scammed with a private buyer?

[Ostrichsak]

That won't actually protect you, that would just make you complicit with the check fraud scheme. Even if they deposit the money into your scratch account, and then transfer it, the bank can still come after you for the full amount of the deposit. Then lawyers get involved, possibly the police or FBI, and then is it really worth your time and effort? There are endless stories of people depositing big checks that the banks automatically clear after a couple of days, only find out a week or more later it's either a band check or the source account is empty and the check actually bounces. Personally, I still would never do a transaction like this with paper checks. Wire transfer or ACH is the only way to go, even if it costs you $25. You can also go with actual cash, but any cash transactions greater than $10k are reported to the feds. I'd also be leery of counterfeit bills -- because if you accept counterfeit bills and they're detected when you go to deposit them -- guess who eats its? You do.

That's not how it works. If your bank clears it, the funds are yours. Period. Your story sounds like someone who deposited and immediately released the item for sale because it was deposited and assumed they had the money at that point. The person in question likely received an out-of-state check or cashier's check, deposited it and then released the item (car, boat, whatever) before verifying that funds had actually cleared their account.

Your agreement with your bank reads specifically that any deposited funds above your check cashing limit (this number varies depending on your combined balances *liquid assets, not loans* and your relationship with your bank and what a manager is willing to sign off on if you take it to that level) will be held until they clear. In-state is next business day for most banks with out-of-state being around 3-5 business days. This can vary depending on institution but rarely longer. Most banks these days can process checks faster than what is in the agreement. Once the funds are officially cleared by your bank... it's yours. They're now saying that money is yours once it's cleared and no matter what is found beyond that point... the money is yours. This is in your banking agreement and not just something I *think* should happen. If they go against this and claw the money back after they cleared the funds you can lawyer up and it will be an easy victory based on the agreement verbiage. Source: I was in banking for a number of years.

 

[HankLloydRight]

That's what you may believe, but there are plenty of examples of the bank coming back to withdraw funds from an account when it was (eventually) discovered a check was bad or NSF.

 

[Barry]

Points taken, Hank.

The reason I use the empty acct for online transfers is to protect my "real" acct number from fraudsters. I understand about the bank going after the money even if the transfer acct is emptied.

Re the CTR for 10K+ cash transfers, that's not a big deal. The feds track these looking for drug money. As long as you have documentation for the source of the cash, if they ever ask about it, and pay any taxes due (none in this case with a depreciated item), you're free and clear. One time, a number of years ago, I opened an Amex online bank acct to hold some cash between real estate transactions a few months apart. The bank called me and asked where the money came from. My answer, "I sold a house" satisfied their curiosity.

 

[Ostrichsak]

That's what you may believe, but there are plenty of examples of the bank coming back to withdraw funds from an account when it was (eventually) discovered a check was bad or NSF.

This has nothing to do with "belief" as you put it. It's right there in black & white in your contractual agreement with your financial institution. If a bank chooses to go back on their agreement (which would be rare) and the consumer does NOT exercise any sort of legal action to recover their losses... well... that level of stupidity in those unbelievably rare instances certainly are the exception to the rule.

Like I said, the only thing the seller can lose in this situation to become a victim of fraud is the care/title and maybe their personal information. If the buyer is willing to send a cashier's check (or even a personal check) ahead of any sort of transference as a guarantee from the seller (other then personal information with which to send the check to) there really is no risk. It amazes me how many people here are terrified completely of what is a basically a low-risk private sale transaction. No wonder people are willing to pay tens of thousands more or accept tends of thousands more from a "trustworthy" buyer/seller. Life is scary for some I guess. (Not directed at you specifically... just a general statement)

If you're that concerned about your bank in this situation that you can trust them to honor a contractual agreement then you need to find a new bank. This really has nothing to do with the situation in discussion here though as it's entirely independent since you can't trust them with anything.

 

[HankLloydRight]

Well then, I guess all those people screwed over by clawbacks from bad checks were fictional. Got it.

Do you do anything other than argue with people on this site, and/or tell them they're wrong?
I don't think I've ever seen you provide any constructive or helpful information here once.

My ignore list is about to double in size.

 

[Ostrichsak]

Well then, I guess all those people screwed over by clawbacks from bad checks were fictional. Got it.

Do you do anything other than argue with people on this site, and/or tell them they're wrong?
I don't think I've ever seen you provide any constructive or helpful information here once.

My ignore list is about to double in size.

Do I do anything else? Yeah, I help lots of people and provide lots of valuable information based on first-hand experience instead of speculation, guesses and "things I once heard" as so many do. I also sponsor your development efforts with purchases and donations. I guess I see where that gets me in your eyes even on a topic I'm 100% right on based on fact & first-hand experience even as I struggle to find your facts and data supporting your "side" on this conversation other than speculation and heresy.

I argue with people who spread FUD and misinformation as fact. There's entirely too much of that going on these days which is evidenced by the amount of terrified people in this thread alone. In this case, you're wrong. Not sure how else to sugar coat that since I attempted to be diplomatic about it so I guess I'll just say it in no uncertain terms. If that earns me a spot on your coveted ignore list, then by all means... have at it. Not really someone I care to knowledge transfer with anyway.

 

[TunaBug]

That's not how it works. If your bank clears it, the funds are yours. Period. Your story sounds like someone who deposited and immediately released the item for sale because it was deposited and assumed they had the money at that point. The person in question likely received an out-of-state check or cashier's check, deposited it and then released the item (car, boat, whatever) before verifying that funds had actually cleared their account.

Your agreement with your bank reads specifically that any deposited funds above your check cashing limit (this number varies depending on your combined balances *liquid assets, not loans* and your relationship with your bank and what a manager is willing to sign off on if you take it to that level) will be held until they clear. In-state is next business day for most banks with out-of-state being around 3-5 business days. This can vary depending on institution but rarely longer. Most banks these days can process checks faster than what is in the agreement. Once the funds are officially cleared by your bank... it's yours. They're now saying that money is yours once it's cleared and no matter what is found beyond that point... the money is yours. This is in your banking agreement and not just something I *think* should happen. If they go against this and claw the money back after they cleared the funds you can lawyer up and it will be an easy victory based on the agreement verbiage. Source: I was in banking for a number of years.

This is wrong. Once the check clears it can still be taken back. It happens all the time, I had a tenant paying rent who managed to pull back funds in December for rent paid/deposited on October 1 by telling his bank that the check was stolen an deposited fraudulently. Regardless how naively you interpret your agreement with your bank, I promise that the banks' agreements with each other and check clearinghouses is something they take far more seriously.

Cashier's checks: the funds are only "guaranteed" in the sense that the bank issuing the check verifies that the buyer has the funds: the bank takes funds from the buyer's account, moves it to the bank's own account, and the cashier's check is written on the latter. So you know that at some point in time the buyer had the funds to back the check. HOWEVER, a cashier's check is still a check. The seller could go back to the bank and request a stop payment claiming that the check is lost, or requesting funds back claiming that it was stolen and deposited fraudulently: the buyer's bank will claw the money back from your bank, then return the funds to the buyer.

In 2020 my wife bought a car from a local Honda dealer. She was paying in full, but they insisted on a loan application just in case she did this fraudulent thing. She offered to go across the street to the credit union for a cashier's check: same thing.

An ACH (the thing behind direct deposit, or the bill pay where your landlord/utility collects funds from you), has exactly the same issues.

Or, to summarize: there is no positive acknowledgement that the transaction is completed and finished.

If I were the seller: I would open another account at my bank. Have the bank print out the wire instructions: whether to paper or PDF, this avoids possibility of transcription errors, so if funds go to the wrong place it can be shown that it is not the seller's fault. Once you have the funds transfer the money to your main account, and then close this new account.

 

[TunaBug]

This has nothing to do with "belief" as you put it. It's right there in black & white in your contractual agreement with your financial institution. If a bank chooses to go back on their agreement (which would be rare) and the consumer does NOT exercise any sort of legal action to recover their losses... well... that level of stupidity in those unbelievably rare instances certainly are the exception to the rule.

Your contractual agreement with your bank will have disclaimers that the bank will not protect those cleared funds if the payer claims it was done fraudulently. As a practical matter, the bank is not going to get into a long protracted legal battle to protect you against fraud: if the payer convinces their bank to claw back the funds then your bank is going to say "ok". When you complain to your bank their support people might politely suggest that you hire an attorney to deal with the payer.

 

[Ostrichsak]

This is wrong. Once the check clears it can still be taken back. It happens all the time, I had a tenant paying rent who managed to pull back funds in December for rent paid/deposited on October 1 by telling his bank that the check was stolen an deposited fraudulently. Regardless how naively you interpret your agreement with your bank, I promise that the banks' agreements with each other and check clearinghouses is something they take far more seriously.

Cashier's checks: the funds are only "guaranteed" in the sense that the bank issuing the check verifies that the buyer has the funds: the bank takes funds from the buyer's account, moves it to the bank's own account, and the cashier's check is written on the latter. So you know that at some point in time the buyer had the funds to back the check. HOWEVER, a cashier's check is still a check. The seller could go back to the bank and request a stop payment claiming that the check is lost, or requesting funds back claiming that it was stolen and deposited fraudulently: the buyer's bank will claw the money back from your bank, then return the funds to the buyer.

In 2020 my wife bought a car from a local Honda dealer. She was paying in full, but they insisted on a loan application just in case she did this fraudulent thing. She offered to go across the street to the credit union for a cashier's check: same thing.

An ACH (the thing behind direct deposit, or the bill pay where your landlord/utility collects funds from you), has exactly the same issues.

Or, to summarize: there is no positive acknowledgement that the transaction is completed and finished.

If I were the seller: I would open another account at my bank. Have the bank print out the wire instructions: whether to paper or PDF, this avoids possibility of transcription errors, so if funds go to the wrong place it can be shown that it is not the seller's fault. Once you have the funds transfer the money to your main account, and then close this new account.

It's not wrong because even in your rent scenario the onus falls on the bank to prove that you acted in a fraudulent manner to reclaim funds. They can't just claim "fraud" and get the money back w/o banks following up on that claim. This includes a criminal charge that has to be proven for that to stick since they bank already cleared those funds to your account by a significant period of time at that.

If you let YOUR bank take that money w/o a fight if you deposited in good faith then that's on you. It doesn't mean that's what "can" happen it means it's what you "let" happen. Big difference. Again, exception to the rule. These super rare exceptions should be met with litigation that will end swiftly in favor of the person filing suit. It will go back to the banks to figure out who's eating it and the one who granted their client back the money w/o putting forth due diligence to determine if their customer was full of it or not. Instead, banks can act badly because customers so rarely know their rights and surely didn't read the agreement before signing when opening a new account.

Tell me you don't still bank with this institution.

 

[Ostrichsak]

Your contractual agreement with your bank will have disclaimers that the bank will not protect those cleared funds if the payer claims it was done fraudulently. As a practical matter, the bank is not going to get into a long protracted legal battle to protect you against fraud: if the payer convinces their bank to claw back the funds then your bank is going to say "ok". When you complain to your bank their support people might politely suggest that you hire an attorney to deal with the payer.

Untrue. If they come to your bank asking for the money back claiming fraud then your bank is under zero obligation to take that money from you to give them in complete vacuum of proof of you acting in a fraudulent manner to attain those funds. If you let them have that money when you were simply acting in good faith based on the agreement between not only you and your bank but the agreement between you and your tenant then that's on you for simply accepting that.

Again, tell me you moved all of your accounts to another financial institution after much research of their practices.

 

[auger]

I hope the OP takes the check and ships the car so we can all find out how this story plays out.

 

[scrapps]

I hope not because it's clearly a scam and I'd hate to see fellow forum member get swindled.

 

[HankLloydRight]

. I also sponsor your development efforts with purchases and donations. I guess I see where that gets me in your eyes

I sincerely appreciate the support, but does that mean I have to agree with you?

My observation is that most (if not all) of the time, you jump out of the gates harshly attacking people with an immediate adviseral tone and attitude, just to prove people wrong (or at least think you are proving people wrong). There are much nicer and friendlier ways to engage people you think are wrong, without attacking these people who provided zero provocation. Everything you post is said with complete absolutes, you're always 100% right, and there's no point in arguing with you since everyone else is always wrong, everytime. As the saying goes: "You can catch more flies with honey than with vinegar" or as dictionary.com rephrases it: "You can win people to your side more easily by gentle persuasion and flattery than by hostile confrontation." Words to live by.

 

[Ostrichsak]

I sincerely appreciate the support, but does that mean I have to agree with you?

My observation is that most (if not all) of the time, you jump out of the gates harshly attacking people with an immediate adviseral tone and attitude, just to prove people wrong (or at least think you are proving people wrong). There are much nicer and friendlier ways to engage people you think are wrong, without attacking these people who provided zero provocation. Everything you post is said with complete absolutes, you're always 100% right, and there's no point in arguing with you since everyone else is always wrong, everytime. As the saying goes: "You can catch more flies with honey than with vinegar" or as dictionary.com rephrases it: "You can win people to your side more easily by gentle persuasion and flattery than by hostile confrontation." Words to live by.

No, it doesn't mean you MUST agree with me but shouldn't you at least consider my position, supporter or not?

I'll take the bait, let's examine your critical review of me as a member of this community, shall we?

You say that most of the time I jump out of the gates "harshly attacking" people. Let's use this thread as an example since you felt the need to derail the conversation here because you clearly felt I was "harshly attacking", right?

My first post to this thread was the complete opposite of what you just claimed. It represents exactly what I just said about my posts; It was me posting first-hand information meant to help and challenge misinformation in a non-confrontational manner to better the community via knowledge transfer.

Someone presents FUD as fact to counter what I just stated and even then, I'm asking specifics about their stance to hopefully bring out an intelligent conversation on the topic since I can provide insight. This is where people tend to fade out of the conversation when their stance is challenged and they actually don't know their stance as well as they initially thought they did. Kind of like people saying Teslas burst into flame all of the time when you mention you own one because that's "what they heard" so it becomes fact. I digress.

As the thread progresses, you find me going into even further detail when I feel like someone is possibly reading what I'm saying wrong (or I'm wording it poorly) so it's not understood in a way that could potentially be dangerous to them. In an effort to make sure what I'm saying is understood fully, I go into more detail of what I'm saying. My intent is to help the community with my first-hand experience on this topic. Anyone who takes a moment to search the words in this topic will find useful and helpful information rather than just FUD and speculation. This is, as always, my motivation. I spend a lot of my time typing up posts in great detail with the motivation to provide knowledge that others might benefit from. I also benefit from similar information on topics I'm not as knowledgeable on and this is why I feel compelled to give back. This is how communities work.

Fast forward a little bit more and we start to see people coming out of the woodwork to drop pure unsupported FUD as fact to further scare people away from actually considering if it's something they should be fearful of or not. That's the only part where my tone isn't friendly and supportive and I think you can see why. That post does NOTHING to intelligently further the conversation.

Shortly after that, others (namely you) come in directly challenging my posts while offering no fact or proof of their stance. Even though I'm confident in what I'm saying, I'm still not "harshly attacking" anyone. I make it clear on the front end of my post that the information contained therein isn't accurate just so people who don't read word walls (such as this) know at least that there's reason to doubt the quoted post just in case they genuinely find enough interest in the topic to research further. I was diplomatic and at no point did I "harshly attack" you or anyone else yet you seem to be convinced I did. Why is that?

I'm really not sure how I can ever overcome a few member's insistence that I'm the devil and can do no right. Honestly, I don't even care to because the problem is theirs, not mine. The few people who seem to have a problem with me offer nothing to better the community so it's no loss. You're about the only one that has done anything that benefits the community so it's too bad I can't convince you to read my posts with a little bit more of an open mind as to what I'm actually saying w/o assigning tone that was never intended. You're free to believe whatever you want and it's clear that I'm not going to change your mind so I won't lose any sleep over it.

I actually feel like I kept it together pretty well considering that I provided my bona fides on why I'm a subject matter expert on this particular topic then had numerous people challenge my expertise with zero fact or proof other than hearsay and conjecture while spreading FUD and misinformation. You'd be cool with that being presented as fact knowing that the misinformation could end up costing someone tens of thousands of dollars?

Maybe it's your insistence to read tone into my posts whenever you see my username that is causing you to see my posts in a negative light when they're actually not negative at all?

 

[Ostrichsak]

There are lots of articles to support intense skepticism and distrust of our favorite bird scrotum’s fundamentalist financial advice, but I think this one covers it the best.

Why cashier’s check scams are so popular online

Craigslist, Facebook Marketplace, and other places people buy and sell online are seeing an uptick in this particular kind of scam.

www.vox.com

Good luck OP. No financial institution is going to give you $50k in cash in exchange for a cashier’s check on the spot, or even 24 hours later, so your reliance on this as a gauge of authenticity is flawed. You are right to be distrustful of this entire transaction.

Please cite specifically where I said a bank would give $50k cash for a check on the spot.

 

[ucmndd]

Please cite specifically where I said a bank would give $50k cash for a check on the spot.

I didn’t say you did. That’s what OP seems to be banking on (pun intended) as a means to verify the authenticity of the check.

That’s a separate point to your insistence that this transaction is without risk to the OP, which I disagree with. As I said in my first post, I think the article I included explains why fairly well.

 

[Ostrichsak]

I didn’t say you did. That’s what OP seems to be banking on (pun intended) as a means to verify the authenticity of the check.

That’s a separate point to your insistence that this transaction is without risk to the OP, which I disagree with. As I said in my first post, I think the article I included explains why fairly well.

I didn't say it's without risk so stop putting words in my mouth. I was quite specific on the steps to take to minimize risk.

Followed properly, the risk will be nearly zero. Again, the buyer hasn't asked for anything until after funds have cleared. So, I say once again, tell me where exactly the seller can be scammed if they hold the car and the title until after funds clear.

 

[ucmndd]

I didn't say it's without risk so stop putting words in my mouth. I was quite specific on the steps to take to minimize risk.

Followed properly, the risk will be nearly zero. Again, the buyer hasn't asked for anything until after funds have cleared. So, I say once again, tell me where exactly the seller can be scammed if they hold the car and the title until after funds clear.

I guess it depends on what we mean when we say the check has “cleared”.

In this thread you’ve said:

“Wait until after the check has been processed fully and funds have been made available in your account.

Once that is done, there's no way for your bank to come back on you. They released funds in full and the check cleared.”

And also:

“That's not how it works. If your bank clears it, the funds are yours. Period.”

As I’ve said twice now, the article I’ve posted does a good job of explaining why I find this explanation to be misleading at best and downright false at worst. A bank making funds available to you in advance of the clearinghouse process in no way makes the funds “yours, period”, and there are many many many examples of banks taking those funds back after the fact and leaving the seller on the hook. OP is right to be highly skeptical. There are ways to control the risk - calling the issuing bank as you suggested is a great start. Insisting on holding the car/title for 2-3 weeks post deposit is a good next step. But I think in any case the hassle and risk associated with dealing with a check outweighs any risk associated with a wire transfer.

Anyway. I don’t really care to argue further. I think Hank’s generally got the lay of the land as far as characterizing your posts in these sorts of topics and you and I have had exchanges in the past regarding your fundamentalist views on financial matters, so it probably does nobody any good to press those points further.

 

[Ostrichsak]

You know, it's easy to tell when someone has lost an argument when they have to resort to ad-hominem attacks. Something you do quite often when everyone else dumps on you for your frequent, useless, and unsolicited "advice". If anyone wants a crystal-clear example of this behaviour, just read this (closed) thread.

And to quote someone else from that thread:

Unsolicited advise? Did you even bother to read the title of this thread or are you too busy coming at me personally to realize what the conversation was even about?

 

[IamGaryGnu]

I hope the OP takes the check and ships the car so we can all find out how this story plays out.

the OP just soiled his diapers and is afraid to accept the envelope, let alone deposit the check. i had planned to force the bank to cash it (well, not force, but "please give me $49k, large bills fine") and none of the old, "yeah, sure deposit and i'll wait a few days" - as i HAVE heard of those going south.
I want $11k. there, i said it (numerous times)
but i'm a squeamish guy. there is NO WAY i'd send $49k on a 1 minute call, no due diligence, asking about the car, etc. - the check is supposed to come tomorrow, i may scan it (remove my name) to the forum, and then send back with an apology - sorry, car was sold.
i'll send from post office so my account numbers won't be on it.
will cost me like $6 to send with tracking, and i'll put this to bed.
i'm greedy, but more nervous than greedy.