Red Flags and FedEx and Are You Sure That Check’s Not Going to Bounce?

Sometimes I just know things are going to go wrong. My internal red flags go up, and they keep waving, trying to get my attention.

They’re usually right, and they were this time too. Just not in the way I thought. In much weirder ways.

Last month I wrote about the freelance job Husband secured, and that we were waiting for a check to arrive before we fronted money from our pockets for a photo shoot. The check, for 50% of the contracted amount, arrived just in the nick of time and was deposited to our business account within fifteen minutes of the postal worker placing it into my slightly dewy (hey, it’s Florida) palm.

I was still nervous that the check wouldn’t clear. Just because a bank makes it available doesn’t mean the other party’s bank can’t refuse the check. Banking regulations require banks to make the money available to depositors within a few days, but if the maker puts a stop payment on it, or if it’s written on a closed account, or if the wrong person signed the check, or if for any other reason the bank decides not to honor the check it could take a week or more before my bank is notified, and then another 3-4 days for them to notify me via a bounced check notice.

Oddly, no one at the bank – not the teller, the head teller or even the bank manager – could tell me how long to wait before I was sure to be safe, though the manager did keep saying, “I wish more people cared so much about making sure they were writing good checks!” That’s disturbing on more than one level, isn’t it?

So, fast forward to yesterday. The first check has cleared and the project is over. They tell us they’ve overnighted a check to us (and faxed Husband a copy), then asked us to overnight the completed product back to them that day. It does not include an expense reimbursement for the photo shoot, which they agreed to pay and we invoiced them for separately but at the same time we invoiced the final payment.

Red flag alert!

Husband talks to them, and they balk about paying the expense (they didn’t use most of the footage from the shoot). Husband made a deal with their local representative that he would pay us for the photo shoot (next week some time, hopefully) and release the final product once we get a tracking number for the check. I’m not holding my breath on that expense payment. The dang red flags are blinding me at this point.

Fine. Whatever. I’m not happy about it, but it’s Husband’s call.

So, we’re waiting for the check, and it’s not arriving by the 3pm FedEx promise deadline. Or 4pm. Or 5 pm.

Red flags waving faster than a one-legged man in an ass-kicking contest.

We find out that there’s a weather delay in Memphis and we will not get delivery until today. Husband decides to go ahead and FedEx them the final product. I have visions of a FedEx envelope empty but for the “April Fools!” scribbled on a used tissue.

Breathe…

Now, you’d think FedEx would have us as one of the earliest deliveries, since it was already a day late. Customer service and all. But nooooooooo. I’d set it up to get e-mailed status updates, and at 3:06 pm I get an e-mail that the check was delivered at 2:59 pm. Yahooooooooo……….???????????????????!!!

Um, it was?

Red flags a-wavin’.

I didn’t hear the truck. Contrary to what some people think, I don’t nap the afternoon away (well, not every day). I was pretty sure I hadn’t been napping seven minutes ago, unless I’d suddenly been afflicted with narcolepsy.

I walk to the front door and open it. Nope. No package. I go to the tracking site and it says that the envelope was left at the door. Hmmm. My dog didn’t hear anyone approach…

So now I go outside and look around my front patio. I think perhaps the driver went to the wrong house, so I check my neighbors’ patios. Nope.

I go back inside and call FedEx. And as I’m making my way through the FedEx automated phone maze I hear a truck pull up.

Gotcha, sucka!

I rush to open the front door, and it’s obvious that he was not going to knock; he was just going to leave it.

“I know what you did, ” I say. He looks stricken. “I know that you said you delivered it at 2:59 when you weren’t anywhere near here. It’s now 3:14. That’s fraud, dude. ” FedEx has a policy that they will refund you if they’re late, and at this point they were 24 hours and fourteen minutes late. FedEx guy would get in trouble for delivering late, so he fudged it.

I told him I was going to call FedEx, that he better make this right; I’m pretty steamed. I’m irate. I’m offended.
The guy gives me a million mea culpas, and takes full responsibility. Tells me he’s totally wrong, it’s on him. Tells me he’s going to call his supervisor. He’s shaking.

The wind so totally went out of my sails. I’m a sucker for a guy who takes responsibility.

I realized that our client was getting their money refunded anyway. I realized that this guy could get fired. I realized that my next package could get accidentally “lost” if I made an enemy.

And he took responsibility.

So I told him I wasn’t going to turn him in. And I warned him that the next time the person could very well be even more of a bitch than I am, and he could very easily get busted. Seriously. And I sent him on his way.

Sigh.

Part of me wishes that I’d turned him in. What he did was just so wrong.

Ah, well.

At least we got the check. And in 3-6 months if it doesn’t bounce I’ll even write checks against it.

You Don’t Have To Be Gullible To Be a Victim of a Check Scam

There are lots of news items and articles about Identity Theft, and for good reason. It’s the fastest growing crime in the US, and the more technological breakthroughs there are the more ways there are to steal your identity.

Scary.

Identity theft isn’t the only thing to be wary of. Thousands of people have become victims of Check Scams, and the numbers are growing every day.

Back when I was dealing with InfectionsRUs, I got to watch a bit of Judge Judy and the People’s Court. I was surprised at the number of people who were being sued because they got a friend to cash a check for them, and when the check bounced (it was counterfeit) they didn’t reimburse the friend. As I was sitting there, coughing up lungs all over the place, I couldn’t help thinking that all of the litigants were idiots. Come on! Who is that gullible?

Well, today I got a warning from my bank about it, and I realized the problem is more far-reaching than I thought. Some of the scammers are so clever you don’t need to be all that gullible.

Who are the victims?

  • Ebay, Craigslist and other online sellers. Someone overpays us for an item “by mistake”, then asks us to wire-transfer them back the extra money. Then we find out the check was counterfeit – and we’re out the item AND the money.

I was selling a large ticket item on Craigslist and got contacted by more than one person trying to scam me. I actually set up a meet with one guy before he balked at my cash only requirement, which clued me into the scam he was trying to pull.

  • They tell us they want to buy or rent our home. They give us a check that’s too much, then ask us to go ahead and cash it and wire them the difference.

This almost happened to a friend of mine who was doing seasonal rentals on a property she owned. She e-mailed me the info and asked what I thought. I agreed with her – a scam. She didn’t fall for it, thank goodness.

  • We get notification that we won a lottery or sweepstakes. They tell us to deposit the check, but then ask us to wire them some money to cover taxes or fees or whatever else their crooked brains can come up with.

This one, to me, should have red flag written all over it. Unless you’re a professional sweepstakes and lottery enterer, you’s KNOW you didn’t win any lottery.

  • We sign up with a work-at-home company, and they send us a check or money order to deposit and ask us to help “process payments”. We’re told to keep a percentage of the money and wire-transfer them the rest.

This one is a reach for me, too. But I can see how it could happen.

  • Someone we meet in a chatroom or on a message board asks for a favor: deposit their check and wire them the money. Or they claim to be in love with me and want to come be with me – can I please cash this check?

It took me over two years of near daily communication to be willing to meet in person someone I’d met online, so there’s no way I’d have gotten into any large financial deals with them, wonderful as they may be. I’ve built friendships with people that over time turned out to be friends-not-so-much, but at least I didn’t fall for this scam.

How does it happen?

The basic premise is the same even if the details differ. Someone sends us a check or money order. They ask us to deposit it into our account and then wire them the money. They sweeten the deal by telling us to keep part of it for our trouble.

The Result Is The Same

The check or money order turns out to be counterfeit. It gets returned to our bank unpaid and the full amount will get deducted from our account. We’re responsible, because we are responsible for every check or money order we deposit to our account.

Why Did the Bank Allow You to Withdraw the Money?

Excellent question, which my bank was kind enough to answer. Federal law requires banks to make funds we deposit available within 1 to 5 business days. Just because we can withdraw cash from our account shortly after making a deposit doesn’t mean the deposited items are valid. According to my bank it can be WEEKS before a check or money order is discovered to be counterfeit and returned to our bank. By them the scammers are long gone, and we’re left holding the bag. The empty bag.

Weeks? Weeks! I wonder how many Ebay sellers have gotten checks for merchandise, even made out for the correct amount, thought they cleared and then had them bounce weeks later. Egad!

Why Didn’t the Bank Know the Check Was Bad?

Well, according to my bank their job is simply to process our financial documents. The employees may not be able to determine if a check is valid. That makes sense, really. How is our local teller supposed to know that a check written on an account thousands of miles away was written on a valid account, and signed by the rightful account owner? It’s just logistically impossible.

So, the buck starts, and stops, with me. And you.

How Do We Avoid These Scams?

From Looks Too Good To Be True: An interesting point about fraud is that it is a crime in which you decide on whether to participate. Hanging up the phone or not responding to shady mailings or emails makes it difficult for the scammer to commit fraud. But con artists are very persuasive, using all types of excuses, explanations, and offers to lead you — and your money — away from common sense.

Well, that’s makes sense. We educate ourselves. And we choose not to participate. Ever.

Foreclosure Affects New Buyers, Old Buyers and You

The current state of the housing market is big news all over the country. Here in Florida, consistently in the top (or bottom, depending on how you look at it) five for foreclosure frequency, the situation is dire. I heard the other day that one in three Florida mortgages in foreclosure. How scary is that?

Many of us saw this coming, but could do nothing to stop the train wreck.

First, home prices were overinflated. I love my house, but it’s just not worth what I could have sold it for 18 months ago. No one wants to admit it, but it’s true.

Second, mortgages were cheap, and offered attractive up-front terms. Interest rates were low, especially with ARMs (Adjustable Rate Mortgages). Greedy, badly trained and/or just plain stupid mortgage brokers sat down with eager, badly informed and/or just plain stupid buyers and made deals on loans that they didn’t quite understand, that should never have been made. The buyers’ dreams of home ownership blinded them to the very real probability of future rate increases. Many bought more house than they could afford, regardless of the type of loan.

And here they are.

And they’re not the only ones. Many people who haven’t bought a new house in the recent housing boom are filing for foreclosure, too. Why? Because when people who had been in their homes for five, ten, twenty years saw their home’s value double, they took out their equity by refinancing, or by taking out a HELOC (Home Equity Line of Credit). They used the money to renovate their kitchens, pay off debt, buy other properties to flip or any one of a million other uses.

It seemed like a good idea at the time.

Now that housing prices have plummeted (my own home’s value has decreased by 1/3 in 18 months), they are in trouble. Some refinanced to an adjustable rate loan and find themselves in the same boat as those recent home buyers who simply cannot pay the adjusted rates. They can’t sell their houses – they have mortgages for far more than their house is worth.

So, many are just walking away. Some from houses they’ve had for a year, some from houses that they’ve had for twenty. It’s sending home prices into a tailspin. It’s sending our economy into a tailspin. All while prices for everything else are going up (thank you $100 a barrel oil!).

But the cycle of greed continues.

I’ve heard that some people are taking out every last bit of equity they still have (through a HELOC), then walking away from those debts and buying another place for cash. One of the foreclosed properties. You can get them really cheap now, you know.

They call it cutting their losses. I call it fraud. I call it disgusting.

But I still have a roof over my head, as my financial paranoia has us living below our means, with our fixed mortgage payment at a very comfortable 10% of our income. How do I know what I would really do in their position?

Still, how do they sleep at night?

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