Copyright 2003, Roadracing World Publishing, Inc.

FIRST PERSON/OPINION

Via e-mail:

I saw the “racer who lost money to a Nigerian scam” article and the reply from the gentleman from Morgan Hill, so as a road racer/Michelin distributor/bank manager, I thought I might be able to shed some light on the subject.

A LOT of banks give their good customers immediate or next-day credit for checks they deposit. This is a “good-faith” practice and really like a short-term loan since it is physically impossible to process a check and collect the funds in such a short time. Cashier’s checks in particular often receive special treatment either due to the bank’s policy or state banking regulation since they are supposed to be “guaranteed funds.” At the end of the day, the customer is responsible for depositing “good checks”, not the $10/hr. college student/teller. There is no bank procedure that I’m aware of that can mitigate the risk of depositing bad checks (either insufficient funds or fraudulent), so often times it may be best to accept that “hold” on the check and not use the funds until that check clears the other institution. If the bank called in the afternoon that the check was bad, their risk/fraud department had probably already blocked the funds early that morning based on information they had received the previous night, so that’s probably the reason they didn’t hand over another $4200 (which incidentally the customer would’ve STILL been responsible for when the check was eventually returned).

There were also some major red flags in that transaction: Buying a bike sight unseen, sending a cashier’s check for significantly more than the sale price, asking to wire money right back and a $1500 “gift” for changing his mind about the purchase. There is quite a bit of bank fraud out there, so if something seems too good to be true, it’s best to go with your gut feeling and walk away.

Alex Florea
AFM #49
AF Motorsports Michelin
San Jose, California


(Additional information on Nigerian check frauds is available from http://www.scamorama.com, and thanks to reader Stuart Gregg for the tip.)