Slashdot Mirror
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.'"
Haha, what a tool. Everyone knows that only Nigerian citizens are the real deal.
It may be 7 digits, but at least it's a semiprime
At this point "Nigerian scam" refers to the technique and proceedings more than the origin.
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?
If you read the article you will notice the victim tried to be cautious. He deposited the check into his bank account. He later verified with the bank that the check had cleared. Only then did he wire funds out of his account. Sometime later the bank revoked the checks claiming they had been altered. Since the victim did not have any money to cover the lost funds the bank attached a lien to his property.
It was actually the bank that lost money. The bank is trying to collect from the victim. The victim sued the bank to have the lien removed from his property. He lost, and lost again on appeal.
Frankly, I think it is the bank that should be held responsible here. They are the ones that verified the check was good, that it cleared, that the funds were in the victim's accounts, and they are the ones that allowed the funds to be wired out of the country. Ultimately, the bank will be held liable since they will never collect their $468,000. But they are all-to-happy to do whatever they can to ruin the victim's life in the process.
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.
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
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
The bank DOESN'T sit on checks. They send the imprint (300dpi scan) and the information transcribed into a fixed format record to the check clearing house (its a branch [usually Chicago] of the Federal reserve who make billions of dollars off of the "float" so they DON'T ever let it linger.)
Banks make YOU wait x business days because they can.
The check has usually cleared within a single business day.
MSBPodcast.com The opinions expressed here are my own. If you don't like 'em... Think up your own stuff.
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.
> He later verified with the bank that the check had cleared.
No. He verified that the check had been credited to his account subject to collection. Decades ago the bank would have postponed crediting his account for such a large, unusual item until after they had collected from the bank it was written on, but current law does not allow them to do that. This scam is a direct result of that law.
Warning: this article may contain humor, sarcasm, parody, and perhaps even irony. Read at your own risk.
The banks were altering the deal - pray they don't alter it any further!
"The tree of liberty must be refreshed from time to time with the blood of patriots and tyrants." ~Thomas Jefferson
According to the California Court of Appeal opinion, neither the lawyer for the scam "victim" nor the lawyer for the bank identified the correct legal issue (apportionment of fault per the Uniform Commercial Code). And neither the lawyers nor the Court of Appeal picked up on the federal Check 21 law issue (the law that says banks are required to give credit against fake cashier's checks within one day after deposit).
The plaintiff's lawyer, because he didn't spot the UCC issue, almost certainly failed to discover or put on evidence that the bank was negligent in crediting the fake check.
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.
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.
Why the hell should it take weeks?
Because it can take the account holder weeks to get their statement, see that someone has presented a fake check against their account, and cause the transaction to be dishonored. If this happens, the depositor who deposited the bad check doesn't have the right to the money, even if their account had been credited.
Being "totally clear" is not about moving money permanently; that is final settlement, when the bank says your check cleared they mean it has passed provisional settlement. Being totally clear is about agreeing to move money, and there being no issues.
Since it can take days before a review occurs or issues are reported, 10 seconds is not reasonable for settlement to occur. Even credit card transactions do not make provisional settlement so quickly, it takes 24 hours, and of course is not final until approximately 60 days, before that time the CC issuer has CHARGE-BACK rights, just as the bank paying a cheque has a CHARGE-BACK right.
HOW do you know that collection of the original deposit is final?
When the bank will allow you to withdraw the money out of your account, in cash, while mentioning you need "spending money" because you are leaving on an extended trip* to [insert name of country without extradition].
* Where "extended" >= statute of limitations for bank fraud...
This issue is a bit more complicated than you think.
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?
Heh.
We use the same system in The Netherlands. Checks are completely antiquated ofcourse. But you know what? International bank traffic can have the ability to revoke wire transfers as well. So one day the money is in your account and you hand over the carkeys. The next day the car is gone to Poland or Russia and a week later, the wire transfer is cancelled. And if you already spent that money on a new car, the bank will happily put your account in the red with a 19% yearly interest rate attached.
Don't think that wire transfers from dubious banks in Russia or Africa are much better than checks. You could get a very nasty surprise that way.
Therefore, by the (faulty) logic you're using, you're just a cow with a keyboard - osu-neko (2604)
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