Anybody here know US banking rules?

Sold a car to a man in Louisiana. I got a certified check and took it to the bank. I wanted to make very certain it was good before shipping the car so I asked the teller (just to confirm what I thought I was sure of) how long before I'm guaranteed the check is good. She gives me the spiel about 1/2 the funds available immediately and 1/2 available 5 days later; but then tacks on that there is no guarantee that it won't come back and that if it ever does it will be paid for out of my account.

I ask for how long and she says indefinitely. I kind of jokingly, and expecting 'Well not that much later' response say "You mean even a year later?" thinking that there must be some kind of threshhold and she says if it ever comes back it goes against my account. I say "Well, how about 10 years?" thinking they must be just making a point, and she says "Ever."

So I take another look and see the issuing bank telephone number and ask if we can call them. She happily obliges and we make the call. After a couple official sounding greetings and transfers we are told the check is good. Thinking that takes care of that I say so. She responds "No, it still is not guaranteed not to come back against your account."

I ask to speak to the manager and she confirms - - there is no such thing as a guaranteed check if you are the payee. In response to my dumbfounded question about what the purpose of these types of draft is if they are not actually guaranteed she tells me that is why the advise wire transfers versus paper drafts.

So if for some reason this thing bounces 3 months from now am I really on the hook, or is the bank just stating a position they hope nobody will argue with? I mean, once they get the funds, why would they ever give them back? And if they wouldn't give them back, then I'm off the hook, right? Isn't there some reasonable amount of time after which they would not have to honor a claim of a check being bad?

I'm not expecting the worst, but I did have a friend who get burned on a $16K certified check for an old Mustang that turned out to be a fake. (The check, not the Mustang).

Anybody intimate with the rules for these kinds of drafts.

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Don of Borg - Cool, Calm, Collective.

"Within the next generation I believe that the world's leaders will discover that infant conditioning and narco-hypnosis are more efficient, as instruments of government, than clubs and prisons, and that the lust for power can be just as completely satisfied by suggesting people into loving their servitude as by flogging them and kicking them into obedience." -- Aldous Huxley

I don't follow what you are saying. If you receive a check, certified or
not, once the funds have "actually" been transferred to your account,
the transaction should be completely over. Are you saying that the
funds might be credited to your account before your bank gets anything
from the other guy's bank, and then the other bank might not send the
money to your bank because the check was bad, but take their time
about informing your bank, after which your bank takes back the money
they gave you?

-- Jeff, in Minneapolis

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Once the check clears the issuing bank, you're clear, as that's when the issuing bank has certified, contractually, that it will cover the amount of the check, thereby releasing your bank from liability (which they can not then pass down to you).

The teller is confused, and is probably thinking of a situation where the check is sent to the issuing bank for clearance, but for some reason the issuing bank withholds the funds on that check (could be the issuer of the check wrote a bad check, and the issuing bank is holding the check's funds to help cover their losses).

If a check doesn't clear in a reasonable period of time (thirty days in most states), you can take legal action (check fraud) against the person who issued you the check.

Bank drafts/teller checks/counter checks/certified checks/cashier's checks, etc., are more solid, as the bank checks that the funds are available in the individual's account before they subtract those funds and issue the teller's check. The fee they charge pays, in part, for the minute cost of people who float bad checks immediately before obstaining a teller's check.

If you're really concerned, just tell the purchaser to wire the funds into your account and you'll hand him the pink slip (title) when the funds are available to you. If the purchaser balks, draft a contract to that effect and you can both sign it in the presence of a witness or notary public. It's binding in court.

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I am Mugs, of the Alien clan of Usa, Nordamerica, a Terran, of Sol. Human.

Whoever says "perception is reality" is daft. It's merely an abstraction, and often not a very good one.

...and both banks reap the ~$30 wire transfer fees assessed on the sender and payee.

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"certified checks" can and have been forged--one variant of the "Nigerian e-mail scam" (generalized to non-e-mail cases as well, not always from Nigeria) involves forged certified checks. A bank employee could accept it, but until the bank declares it clear, you don't have the money "in hand" so to speak. So, you don't want to perform your side of the deal till after it clears.

It happened to someone in nearby-to-me Edgewater, MD in the past year--man received a cashier's check for a large amount of money in return for wiring a lesser amount back, which the person did, but the check was found to be fraudulent only afterward.

30 or 60 bucks for a wire transfer is a small price to pay (if we're talking "real money" that is) for the security--and who cares if the banks get rich as a result.

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Todd (Bowie, MD, US, North America, Earth, Sol System, Vega region, Local Bubble, Orion arm, Milky Way Galaxy, Local Group, Virgo A Cluster, Virgo supercluster, the universe in which spock is clean shaven)

Quidquid latine dictum sit, altum sonatur.

personal page: http://blog.astrosketches.info

the only real secure money order is the ones you get at the US post office.
while even those can be faked- it's as easy as going to your closest post office to see if it's good. and if it isn't good, the person that made it is going to get a knock on their door from the FBI, since the Feds don't like it when people do that kind of thing..

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"blacker than the blackest black... times infinity."- Nathan Explosion
The.. Best.. Thread..Ever...

Any check, cheque or Money order is never Truly Guaranteed. Or credit card, debit card...
In the end, even cold hard cash isn't.
Some are more so than others but... Is anything really guaranteed?

Trade is always a bit of a risk. No sense being paranoid about it (Not that I am saying you are being so...) but just take responsible risks and if you really have a reason to be concerned- address the concern responsibly.

What are the odds that this guy is a clever cheque forger?
The bank should know fairly quickly if it clears, and usually they can even confirm it prior to cashing or depositing anyway.
I've taken some hard hits with bad checks in my time.. But that doesn't mean I'm going to stop accepting checks from customers. Most are good and I can pursue those that bounce (usually...). It's a risk but so is NOT accepting the check- then you risk losing the sale anyway.

As far as I am aware the "Certified" check is not truly guaranteed, as tdvance illustrated in his example about scammers. I prefer internet transfers (this is the cheapest option) or bank transfers (money wire). Between most local banks it takes a day or two day before the internet transfered fund become available, this really a small inconvenience.

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This whole internet thing is probably not a passing fad.-Ronald Brak
While speech might be free, consequences cost.-Doodler

It might be related to the rules regarding money orders. Most places (other than mail order businesses) don't take money orders for payment. You could never use a money order to get a hotel room or to buy groceries, for example. You should never accept one for payment of anything.

Why?

Let's say I buy a money order for 500 dollars, then give it to you for payment for a MacGuffin. Once I have the item, I can claim the MO was stolen. Since I have the back copies, I can call up Al's house of Money Orders, or whatever company issued it, and get a full refund of that purchase price. When you try to deposit it, the bank will accept it. When they try to collect on it, Al will tell them it's stolen, the bank will then take that $500 from your account, and probably hit you with a bounced check fee.

There is no actual record of who really bought the money order, since it was paid in cash. That makes this type of fraud hard to track down. Unless the clerk that sold it can recall the specific person that bough that specific MO, there just isn't much to go on. I don't know if certified checks work the same way or not, but the policy sounds pretty similar.

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I'm not evil.
An evil person would do the things I think up.

Here is a news article about a scam here in New Brunswick.
http://miramichileader.canadaeast.co...article/355478

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Maybe I am confused, but in the cases I have needed a certified check, my local bank provided it and deducted the money from my account instantly. In other words, you have to 'purchase' a certified check, so it is guaranteed to be good from the issuing bank. Why else would they call it certified? It is certified by the financial institution to be a good check!

Even with normal everyday paper checks, everything now is handled electronically, no more waiting 4-5 days for them to clear. I use a debit card, but I have seen folks write checks and the business accepting them put it in the check reader thing and it deducts the money instantly, just like a debit card, and return the original check right back to the customer.

We are really dependent on computers/electronic transactions nowadays. Kinda scary.

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Scienara: A rejection of reason and evidence.

After you buy it, what would it take for you to report it stolen and have it stopped?

If it gets stopped between the time you buy it and the time I deposit it, how would I be able to know?

If it gets deposited in my account, and then the bank find out it's stolen, and the only contact information I have for you is a bogus e-mail and the address of Wrigley Field, I will end up eating the cost.

The part I don't get is that after the bank gets the money from the issuing bank, I have no idea how it could ever come back. Althogh, Tax Refunds can be reclaimed by the gov't for up to 7 years, so maybe there is something like that with cert checks?

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I'm not evil.
An evil person would do the things I think up.

I wasn't aware you could have a stop payment put on a cashiers check. When you purchase one, the person or company you intend it for must be on the check. You also get a receipt.

Same as above. I'm not aware that it can be stopped. It's just like cash, but with an intended recipient.

The bank can find out instantly if it is good or not. Also, if it was stolen, it would not have the correct recipient, unless it was somehow forged. Remember, the issuing bank knows who it is intended for.

No, it's a completed transaction as far as I know.

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Scienara: A rejection of reason and evidence.

This biggest issue here is over the word "Guaranteed". In the financial world, words like "guarantee" are not to be thrown around lightly. If you ask if anything is guaranteed in the banking world, with the exception of the $100,000 FDIC insured deposit guarantee backed by the full faith and credit of the United States government, nothing is. But that's not the bank providing the guarantee, they are counting on someone else to step up.

So when you ask any bank employee if any check drawn on another institution is guaranteed, well - guaranteed is an awfully strong word. There is always the possibility - no matter how remote - of some level of fraud or the other bank going insolvent or any other number of possibilities.

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Spock Jenkins of the Vulcan Jenkins'.

You can put a stop payment on a cashier's check. Let's say a person buys a $1,000 cashier's check. The teller accidentally types $10,000. The Bank is not going to eat that $9,000 even if the person walked out the door and tried to deposit it elsewhere. They'll stop payment on it right away.

A check can be "good" and still be stolen. The bank can check to see if the funds are in the account sufficient to cover the amount drawn - but that doesn't mean the check wasn't obtained by the holder via fraud or theft.

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Spock Jenkins of the Vulcan Jenkins'.

But can the person who bought it? I was always told to treat it like cash. If you lose it, it's gone! You might be able to use your receipt to get a refund after a certain time period (assuring the bank no one has tried to cash it), provided you kept it.

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Scienara: A rejection of reason and evidence.

As I stated above, it's very very very unlikely that the check ever comes back - but just not "guaranteed".

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Spock Jenkins of the Vulcan Jenkins'.

Okay, but how will the names match up? That is one requirement I am sure of. The intended recipient must match the person trying to cash it, complete with ID.

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Scienara: A rejection of reason and evidence.