Client Bulletin: Don't Get Scammed

J Thomas Black
Board Certified, Consumer Bankruptcy Law- Texas Board of Legal Specialization

I had a prospective client come in recently, conned and possibly bankrupted by the old “counterfeit check” routine. Someone she had known for over a year, asked her to deposit a large check in her account, and then wire money to an out-of-country business, supposedly to help “facilitate” a business transaction. She did it. Her bank gave her credit for the deposited check the next day, and she wired the money to the 3rd party. The deposited check later bounced. Then to repay itself, her bank takes all her money out of her accounts, and demands reimbursement for the rest.

It has become an all-too-familiar story for many banks: a customer receives a counterfeit check, cashier’s check or money order from a third party and deposits it into their bank account. In accordance with the Expedited Funds Availability Act (EFAA) and Regulation CC, its implementing regulation, the bank makes the deposit available to the customer by the next business day.

After confirming that the deposit is available, the customer delivers the goods or pays money to the third party, believing the check has cleared. Later, however, when the counterfeit check or money order is detected and returned unpaid to the depository bank, the bank deducts the amount of the check from the customer’s account or demands repayment if the customer has insufficient funds in the account.

In recent years, fraudulent activity involving counterfeit cashier’s checks and money orders has increased significantly. Bank regulators are reporting new cases of this fraud on a daily basis.

Additionally, fraudsters are exploiting a discrepancy between the deadlines federal law imposes on banks for making deposits available to customers and the actual time it takes to clear checks and money orders.

Under the Expedited Funds Availability Act (EFAA) and Section 229.10 (c)(1)(v) of Regulation CC , the implementing regulation for EFAA, banks generally must make a deposit available, up to the first $5,000, by the next business day for the following checks: cashier’s, Treasury, money order, Federal Reserve Bank, Federal Home Loan Bank, and state or local government. However, it often takes significantly longer for a counterfeit check or money order to be rejected and returned to the depository bank.

Use caution when accepting payments from third parties, especially when you are expected to refund or pay money back to them. For more information, read the FTC’s article, “Giving the Bounce to Counterfeit Check Scams” at http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre40.shtm


Mr. Black attended the 5th Annual Workshop of the National Association of Consumer Bankruptcy Attorneys (NACBA) in October at the Broadmoor Hotel in Colorado Springs, Colorado. Mr. Black attends far more continuing legal education programs than are required by practicing attorneys, to stay current.

 Quotes

When our relatives are at home, we have to think of all their good points or it would be impossible to endure them.
—George Bernard Shaw

When I was a boy, I lay in my twin-size bed and wondered where my brother was.
—Mitch Hedberg

I don’t have a bank account, because I don’t know my mother’s maiden name.
—Paula Poundstone

A LITTLE HUMOR

The “We Will Be Home For Thanksgiving” Edition
Eddie in Dallas calls his son in New York just before Thanksgiving and tells him, “I am sorry to tell you but your mother and I are going to be divorcing. I just cannot take any more of her moaning. We can’t stand the sight of each other any more. I am telling you first, Eddie, because you are the eldest, please tell your sister.”
When Eddie calls his sister Julie, she says: “No way are they getting divorced, I will go over and see them for Thanksgiving.”
Julie phones her parents and tells them both “You must NOT get divorced. Promise you won’t do anything until I get over there. I’m calling Eddie, and we’ll both be there with you tomorrow. Until then, don’t take any action, please listen to me,” and hangs up.
The father puts down the phone and turns to his wife and says. “Good news” he says, “Eddie and Julie are coming for Thanksgiving and they are both paying their own way.”


IN CHAPTER 13 NOW?

CHECK YOUR ACCOUNT- DON’T LET A SURPRISE HAPPEN TO YOU LIKE THIS!

A chapter 13 client of ours had an unpleasant “surprise” recently when her employer had a payroll glitch, and somehow the wage order whereby the client’s chapter 13 plan payments were being paid, suddenly went from the correct amount, to about 25% of what it should have been.

While most of us would perhaps notice such a big increase in take-home pay and call someone, this client didn’t notice it for several months, until she was $9500 delinquent and the Trustee had filed a Motion to Dismiss her case!

It looks like she will be able to catch her payments up with the help of her husband, but it may be a very tight Christmas season for them! Please, if you are in chapter 13, and if you have a “wage order” where the Trustee payments are being deducted from your paycheck, be sure the correct amount is being deducted, to equal a full monthly payment. Remember that if you are paid “every other week” or bi-weekly, that is a little different than “twice a month” or semi-monthly.

Our office does not know how much is being deducted from your paycheck. It is your responsibility to look at your paycheck stubs and be sure the correct amount is going to your Trustee to pay your chapter 13 plan payments!

If you have questions about it, call or email Rob at my office at [email protected] , or if you just have a question about the status of your payments, you can call your Trustee’s office. If your Trustee is Mr. Heitkamp, his office number is 713-722-1200. Trustee Peake’s office number is 713-283-5400.

Or, you can go to www.13datacenter.com , set up an account, and get detailed information about your case, 24 hours a day.

Call Us If You Need Us. We Also Welcome Referrals

Consumer Bankruptcy.
Debt Collection Defense.
Debt Negotiations and Settlements.
Stop Foreclosure/Repossession.
Student Loan Help.
Fair Debt Collection Practices.
I.R.S. Collection Defense.
Family Law.


ARE YOU IN CHAPTER 13 NOW?

Always keep the law office updated with your current address, telephone numbers, and email address. We may need to reach you quickly. You can check on the status of your Trustee payments, how much you still owe on your case, etc., by going to www.13datacenter.com to set up your user ID and password.

Lose job or overtime? Expenses increase? Want to give up property to lower payments? Call the office for a Motion to Modify worksheet. Complete it and fax it to the office at 713-772-5058. We’ll review it and contact you if a change to your plan is possible.