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Nigerian Email Scam Victim Sues Bank, Loses Appeal
reidhellyer writes "From California Litigation Attorney Blog: 'While many victims of the so-called "Nigerian e-mail scam" would be too embarrassed to trumpet that fact, others end up infamous for their victimhood like the appellant in a published opinion of the California Court of Appeal in Riverside. In March 2009, Charles Peters received an email from someone purporting to be a citizen of Malaysia. The e-mail informed Peters that certain third parties in the United States and Canada owed the Malaysian money, but that “they can not transfer the funds to any bank account outside America continent due to their new company policy [sic].” He asked Peters to “assist me in receiving the funds and forward to me.” He offered to pay Peters 12 percent of the money. Peters agreed after apparently negotiating an increase of his fee to 15 percent.'"
Greed and abject stupidity. Seriously, why would the "victim"(aka mark) think that the person emailing him could not find a bank willing to transfer money for a 15% cut? Most banks transfer a lot more for a lot less money and are a lot more reliable than some random dude you email.
Monstar L
Well, in his defense, Maylasia isn't in Africa. http://en.wikipedia.org/wiki/Maylasia
When a bank tells you a check has cleared, that's only provisional subject to final clearance. Who knew?
I'm not so sure the banks don't share in the blame. After all, they tell people the checks have cleared knowing damned well that most people don't know they might yet yank the money back out for a wide variety of reasons. In this case, the bank was more than happy to transfer a huge chunk of cash from the man's account, far more than he had ever had in there until the recent checks that had "cleared". Now it wants to take it out of his hide rather than pulling it back from the transfer.
The LEAST they could have done is told him when he checked that it was cleared was make sure he knew that didn't mean it couldn't be pulled out again. One lousy sentence out of a teller's mouth could have saved this guy half a million dollars worth of pain.
Yes, he should have known it was a scam (it's not just well known on sites like /., the local news has stories about it from time to time as well), but surely the banks should be VERY well aware of the scam and should at least make a minimal effort to warn their customers.
Of course the people that fall for this are rather naive, but the banks give a good helping hand in fucking you over. If the money is shown as in your account and the bank confirms the check cleared, what are people really supposed to believe? Most people have never heard the words "provisionally cleared" until the bank slaps them with a half a million dollar lawsuit. This is a very common fraud method, other variations is that they somehow "overpay" you and trick you into sending part of the money back or to pay some fraudulent transport company or whatever. In rare cases they'll even try to buy goods and recieve them before the check bounces. Fuck that, the banks should be forced to either clear the check or bounce the check and eat the loss themselves exactly once. If they have to bounce many checks, tough shit. It can't be that hard to set up something like a WU branch office in Nigeria that'll let you send money if you've paid them with real cash and not phoney baloney checks.
Live today, because you never know what tomorrow brings
Asking the bank if the check cleared yields an answer which doesn't mean shit. If none of that means anything, what question must one ask the bank to require them to not reverse the answer? Is there a point where they can't do what ever the fuck they want to do?
I think I just cashed out all my cool points.
IUnfortunately, that's not how the bank thinks. The bank thinks "He used a false check to get money that wasn't his into his account". That he was in turn acting on behalf of a Malaysian fraudster who has run away with parts of the money is not relevant to them, the bank has never given the Malaysian any money. As far as they see it, the fraud was perpetrated by him against his bank account, and that's what they'll recover it against.
As long as you have the insane clearing system as you have, it has to be this way otherwise you could imagine the reverse scam where they collaborate, the bank has to eat a loss of $500k and then the two of them split the profit of $250k each. The sane solution would be a single and final clear/bounce, where the bank eats any loss. That'd probably lead to damn many checks bouncing at first but serious money transfers would adapt quickly and say "this is now the only way the US take payments".
Live today, because you never know what tomorrow brings
To quote Futurama, "you are technically correct, the best kind of correct". Yes this is called an "advance fee fraud", but that isn't how most people refer to this kind of thing. You are interpreting language to be much more prescriptive than it actually is. Language is simply a tool for humans to communicate, not some sacrosanct set of rules that cannot and should not be changed. Most people know this kind of fraud from the Nigerian emails and thus thats how they refer to it.
It's just like "kleenex". Yes, it's technically called tissue paper, but thats now how a lot of people refer to it. If your grandmother asks you to hand her a kleenex and all you have is scott's brand tissue paper are you really going to say, "Sorry grannie, I don't have any kleenex."?
Monstar L
Oh yeah, and I should add to that.. the world needs to get out of last century. I've never written a check in my life, it's all plastic or cash. Debit cards go directly against your account and is far more practical and fraud-safe than checks without the high costs that cause shops to refuse taking Visa etc.
Live today, because you never know what tomorrow brings
So what are you proposing as an alternative? That the banks wait until each check has totally cleared(taking weeks or longer in some cases) to totally clear? What about the vast, vast majority of the cases where the check does clear? Should everyone else be forced to wait weeks so morons won't have to suffer the consequences of their own stupidity?
I assume that is exactly what the poster is proposing, and it is a damn good idea. The bank does not have to FORCE everyone to wait, but they should not say "the cheque has cleared", and then later say "sorry, the cheque has un-cleared, we want that money back."
It's OK for the bank to give you access to the money before they have it, but they should be 100% clear about the possibility of they clawing the money back. They should tell you that it is "provisionally clear" when you are allowed to take the money out but there is a chance they will ask for it back, and they should tell you it is "clear" when they are completely confident that they money is there and you can safely spend it. And once they have told you the cheque is "clear", then they have taken the risk.
Banks could do a lot more to prevent fraud, but they don't have really strong financial incentives to, because most of the banking laws are designed to push the risk from them to you. Why should they care when they aren't the ones losing the money?
I hate it when I make a joke and I get modded "+5 insightful". Mod the stupid comments "funny", not "insightful", pleas
Anyone in the accountancy/banking business would have a whole career of experience telling them that it is both common and ethical to get free money.
Seems like they'd obviously be the ones to fall for it. To the rest of us, the promise of free money sends up a huge red flag, but to them its just a part of normal everyday business.
Regardless of the fact that they told him otherwise, since the check hadn't actually cleared, the bank basically allowed him to overdraft his account by $400k and then took his home to collect the debt. The whole Malaysian scam thing is irrelevant. Does this bank let all of its customers overdraw 6 figures? I think this guy, his lawyer and the bank are all dumb as shit.
bite my glorious golden ass.
FTA: "Peters deposited the $808,988.90 in checks received from the purported Malaysian at the Chino Commercial Bank. After the bank notified Peters that the checks had cleared, Peters wire transferred $468,000 to Hong Kong. Shortly thereafter, the checks were dishonored after the bank detected that they had been altered. Since Peters was personally liable for any overdrafts on the account which had only a few thousand dollars, the bank sought to attach property owned by Peters to collect on the overdraft. The trial court granted the bank’s motion to attach against Peters in the amount of $458,782.60...
Despite the obvious life lessons, the legal one is this – don’t transfer funds received unless and until you know that collection of the original deposit is final. This is particularly true for lawyers and others who receive funds in trust. (Chino Commercial Bank v. Peters, Dec. 13, 2010, Case No. E049170.)"
So my question is this -- HOW do you know that collection of the original deposit is final? (I've never even heard that phrase before.) Apparently being told "the check has cleared" doesn't do it?
We know where leadership by an anti-intellectual "strongman" who scapegoats minorities and likes boisterous rallies goes
After the bank notified Peters that the checks had cleared, Peters wire transferred $468,000 to Hong Kong.
Shortly thereafter, the checks were dishonored after the bank detected that they had been altered.
So what the hell does clearing a check mean? I always assumed that this means that the bank verified that the check was good and they received the funds from the other bank. How much later can a bank claim that a check is no good after it has cleared it?
He doesn't sound quite as dumb as the blog post made him out to be.
If I deposit a check, and the bank tells me on the phone or in writing that it cleared, as an ordinary non-financial person I would assume that the money is secure in my account.
A bank has a greater knowledge of these matters than its consumer customers, and therefore a greater obligation.
My bank should be serving me and making a reasonable effort to look after my interest and avoid fraud.
The bank should know that these scams are going on. They should know that some of their customers are likely to fall for them, thinking that they've deposited valid funds.
The banks could stop this fraud by making it clear to their customers that even though the check has cleared and the money has been entered into their account, the entry is just provisional.
I think a bank has an obligation to do so.
So the victim had a reasonable case against the bank. He might have won if the courts decided that way. They didn't.
So now this fraud will go on.
The scammer successfully made off with $460,000 that never existed. This is no "I need $200 from you to cover the transferal fees" scam. This is some crazy shit.
Either the person has a legitimate condition limiting mental or emotional function, and as such needs to be protected from themselves (i.e. Dementia, Psychosis, Alzheimer, etc.)
OR
Someone has just paid their idiot tax. Being, promoting, empowering, electing, and/or justifying stupid is expensive, and our society is continually finding new and more interesting ways of paying that tax every day.
Do you know what you call a doctor if he pronounces you "perfectly healthy" but what he really means is there's an odd spot on your lung but it almost never turns out to be a rapidly developing cancer?
The defendant.
In other words, unlike the doctor, the bank KNEW that it was only provisionally cleared but chose not to inform the man of that rather important bit of information. It sounds to me like exactly the sort of "let's not worry about the impossible" that lead to the big financial meltdown.
I think in some cases it is not because they cannot see through the scam, but rather because they think they are safe. Consider that they receive all the money first, and then they transfer part of it on. It is not like they are paying somebody money before receiving their own share. But then after they have received money (possibly from a victim from internet banking phishing) and transferred part of that money to an account abroad, the original transfer is reverted.
Somebody who is in that position where they thought part of it through but forgot the part about the first transaction being reverted will have to play stupid. They cannot admit that they had some idea what was going on, because then they would admit to have deliberately taken part in the crime. Playing stupid may be unlikely to get your money back, but with a bit of luck it may save them from a sentence.
Not saying this is necessarily saying this is what happened in this case, just saying that these people may not be as stupid as it looks. One saying goes: "Never attribute to malice what can adequately be explained by incompetence", another saying goes: "Any sufficiently advanced incompetence is indistinguishable from malice". But in some cases it may actually be a combination of malice and stupidity, and it can be hard to tell how much of each.
Do you care about the security of your wireless mouse?
Oh yeah, and I should add to that.. the world needs to get out of last century. I've never written a check in my life, it's all plastic or cash.
I still use mostly checks to pay bills. I'd like the convenience of electronic payment of some kind, but not in the current implementation where businesses have saddled it with a bunch of baggage that allows them to continue leaching funds directly from customers whether the customers want them to or not. When I was younger, I learned the hard way that it's a lot easier to refuse to send a company a check than it is to get them to refund money they've already yanked out of your bank account.
"...always new atoms but always doing the same dance, remembering what the dance was yesterday." -Richard Feynman