what are my options after a check fraud?

Question

my girlfriend got scammed an amount of $14000 through a counterfeit check that was written in her names.She deposited check , withdrew funds and sent it to scammers by western union; check bounced a few days later.she now owes the bank $14000;please advise.Is the bank insured against such losses?

Answer 1

The people she sent the money too are probably in another country(Canada or Nigeria) and finding them is going to be impossible, so they will go after her. Because in the eyes of the bank she is the one who scammed them.

She can attempt to talk to their fraud department but it is very unlikey that they will do anything for her. Worse yet, for $14,000 they will go after her for the money and this is going to haunt her for years to come.

Hopefully, she will treat this as a very expensive lesson learned as if something sounds too good to be true it probably is.

Answer 2

Yeah, the bank is "insured" against that. By your girlfriend, unfortunately. Any time you present a check at the bank YOU are responsible for the check if it bounces.

She should contact the police. Hopefully she has kept any documentation of the incident, including the envelope that the check came in. A photocopy of the check would help as well, the bank can provide that if she didn't keep one herself. She shouldn't hold her breath though. It's likely that the funds were collected in some far-flung hellhole in Nigeria or some other such corrupt location where recovery of the funds will be impossible.

If she has homeowners or renters insurance that MIGHT cover some of her losses. She should contact her insurance company if she has coverage. Some policies cover fraud losses but there usually is a ceiling that they will pay. Even if they do she'll have to come up with the deductible herself.

Answer 3

One of the possible analyses of this case may run as follows.

There are two separate transactions:

(1) She deposited a check that the drawee bank dishonored. The scammer was the drawer. She was the payee. The drawer’s bank was the drawee or payer, her bank was just representing her as depository bank to process the transaction. There may be a number of intermediary banks in between her depository bank and the scammer’s payer bank. Her bank’s responsibility was only limited to verifying that the indorsement (signature on the back of the check) was truly hers. She was responsible, in turn, to enforce payment from the scammer-drawer. The drawee bank was only responsible to obey the scammer-drawer’s order to pay if the credit contract and current fund standing so required.

(2) She withdrew the fund from her account and wired it to the scammer. For this second transaction, her bank was only responsible to verify that it was her who signed the slip to draw the fund, and could not care about what she subsequently used the cash for.

In a court of law, there will be two elements to consider: issues of law, and issues of fact. Issues of law are relatively clearly against her as spelled out by Article 3 of Uniform Commercial Code. Issues of fact might have a point of uncertainty where the rule of “comparative negligence” may apply on her benefit.

For the first transaction, comparative negligence might involve the payee bank which paid the fund without the due diligence of verifying the signature and sufficiency of fund of the scammer-drawer allowing a “perfection” of the scam. If that was the case then the payee bank may have to share part of, or burden the entire, loss.

For the second transaction, when the payee having not paid the fund, and that implies that her bank, the depository bank, advanced to her the fund that she wired to the scammer either on credit, or on debit against her account balance, or partially on both. If the $14K, or part of it, was on credit and that she had no overdraft agreement covering that much a credit portion, then her depository bank might be in a comparative negligence situation.

The prosecutor attorneys in her DA office should take the criminal portion of this case to work either against her or on her behalf depending on all the other facts of the case.

For the civil portion that her depository bank may litigate against her she has the choice of hiring her own counsel.

This scam is a criminal against the public, and I take your words for faith that your friend is but a victim: Is it unfair that the law favors the rich banks and turns its back on a poor victim? The answer is, when she is truly a victim and comparative negligence is not proven, that the law is fair to put the civil burden on her because she is the only party who was in the position to identify the fraud.

The above are not legal advices. I am not a licensed attorney.

Answer 4

she needs to contact the police asap and file a report, for 14k, she is in serious danger of being arrested!! She needs to print out ALL correspondence she had with the persons and any envelopes etc ANYTHING to prove that she is a victim....She will still have to pay back the 14k sadly, but they will work with her, and trust me, it will be better than the 4-5 years in jail she is facing....