Victim Of a Counterfeit Check

Victim Of a Counterfeit Check

I thought I had a $15,000 Business Loan check that turned out to be a counterfeit. Now I am $800 overdrawn in my account.

I had a $15.000 Business Loan check clearing my bank so I wrote checks freely. The check was bogus and the company a scam! I am $800 overdrawn and a grocery store has threatened to call the sheriff! I have bad credit and a loan is next to impossible to get! My bank has closed my account. What should I do?

Unfortunately, when you deposit a check into your bank account, you are responsible for any withdrawals made against that check, even if the check turns out to be counterfeit. Under federal law, banks are required to make funds available to their customers within strict time frames, even if it takes more time for the bank to verify that the check is valid. When you deposit any check into your bank account, you are, in effect, vouching for the validity of the check because the bank may be required to give you access to the funds before it has an opportunity to check the item itself. If the check you deposited later bounces or turns out to be counterfeit, the bank has every right to deduct the funds from your account.

Therefore, you should not draw funds against any check which you have recently deposited unless you are certain that the check will clear (i.e., the check is from a friend who you know has the money to cover it); if you are not absolutely confident that a check you have deposited will clear, you should not draw any funds against it for risk that the check will bounce and the funds you thought you had will suddenly be pulled out of your account, leaving you holding the bag.

Anytime you are doing business with a company or individual for the first time, you should wait until your bank has confirmed that the check is good before you draw any funds against it; otherwise, you may find yourself with a negative account balance, bounced checks, and little recourse against the issuer of the check.

The type of situation you describe, in which a consumer deposits a large check which turns out to be bogus, is a fairly common fraud perpetrated by various criminal organizations around the world. In your case, I do not know enough about the company which issued the check to say whether or not it violated any laws in this transaction; however, given how common counterfeit check scams have become, I would say that it is certainly possible that you were a victim of fraud.

The Federal Trade Commission (FTC) offers a wealth of information for consumers who have found themselves in similar situations. If you think that you were the victim of a counterfeit check scam, or any other fraudulent activity, you should contact the FTC as well as your state’s attorney general; you will find contact information for both agencies on the FTC’s website. You may also wish to contact your local police or sheriff’s office to report this counterfeit check; while it is unlikely that they will be able to do much to assist you, at least filing a report will create a record which you can reference if any further questions arise related to this bounced check.

Unfortunately, you are almost certainly responsible for any amount which has been overdrawn from your bank account, as well as any checks that your bank returned an unpaid. You are ultimately responsible for all funds withdrawn from your account, regardless of whether or not you thought you had the money to cover the transactions. That said, I would expect that your bank and your other creditors will be willing to work with you in establishing repayment arrangements if you explain that the problems with your bank account were due to a counterfeit check which bounced, not simply from negligence on your part in keeping track of your funds. I encourage you to contact any entity to which you wrote a check that was returned to explain the situation and try to negotiate an affordable repayment plan.

I wish you the best of luck in resolving this unfortunate situation, and hope that the information I have provided helps you Find. Learn. Save.




RRobert Simmons, Jul, 2012
What happens when the check is from an established organization? I have been working a summer job (before going to graduate school). I received my first paycheck and put it in the bank. The funds cleared but a few days later the bank put my account on hold. As of yesterday, the bank has deemed that the check was fraudulent and that I am a risk to the bank. My account is being closed. Is this my fault? I have known of this organization for a few years and has a well established reputation and Board of Trustees in the city of Newark, NJ. Was I supposed to assume that their check would bounce?
BBill Admin, Jul, 2012
Talk to the payroll department at your employer immediately. Your employer should pay any fees the bank charged you for the bounced payroll check.

If you had a reasonable expectation the payroll check was good, then you were not at fault when you presented the check for deposit into your account. That is what millions of employees do every payday, and almost all payroll checks clear without issue. Don't beat yourself up for acting reasonably.