Bad Check Wire from Buyer freezes my entire bank account! How do I prove Innocence?

[newageinc]

I'm hoping the aspkin community of sellers can help me with this one.

A buyer that I do not know contacts me about an auction I have up. We negotiate an offer of $3000 via email. For this amount, he agrees to send bank wire transfer to complete the payment.

On Wednesday I see the amount added to my balance in my bank account. Never touched it or attempted to withdraw it.

On Friday, the bank puts a hold on my entire account, while they investigate. Turns out, the guy deposited a bogus check, and wired that balance to me. The problem is, I thought the guy was sending a bank wire transfer of cash in his account. The guy is completely a fraud, trying to get me to ship the goods before realizing the payment was ⊗⊗⊗⊗, but now the bank is suspicious that I may be a part of his scam, afraid that I know this guy, so they have frozen my entire account for up to 60 days while they investigate.

I would think they would only freeze the $3000, but they've frozen my entire account, my only account for food, bills, living, etc. with intent to close it permanently in 60 days. I go to my bank, and a rep has advised me to file a police report against the buyer. All I have is his name (probably ⊗⊗⊗⊗) and his address where he wanted me to send the goods, before I could find out he paid with bounced or ⊗⊗⊗⊗ check.

Has anyone else had a bank account frozen over a matter like this, and how can I prove to the bank that I am the victim of someone attempting to fraud me out of goods with a bogus payment?

[pod]

So one bad check and the bank freezes you out and says they are going to close account for good? What info are we missing here? Sorry, but I can not see a bank doing this over one bad transaction. And you didnt even withdraw the money

Either we are missing something here or you need to go over the head of whoever you delt with at the bank.

[fenway]

Sorry to hear about that. I am not as knowledgeable as many of the others here, but i would first start with the ebay ad. let them have your log in if necessary and all the info with emails you can provide, so maybe they can see first hand. i have had this happen to me for 800.00 with BOA account, and i took everything to them and logged into my laptop in front of them etc. 2 days later they called me and said bring that back down and meet with a police officer at the branch and they would unfreeze it.


So i went to the bank and complied, and money was released immediately upon filing report in front of them.

Hope this helps a little.

[pod]

Great help fenway! Cheers to that.

[newageinc]

I was afraid someone here would get skeptical and think I'm not telling the entire story, but that's what happened, honestly.

Thank you for your advice fenway. I feel so silly for allowing this to happen to me, and not having another account somewhere for emergencies. This account was my lifeline, rent is due in 3 days, bills to keep the internet and power on to stay in business are due soon, and this has created a mess.

I do have all of the emails and info to prove I don't know this guy and I'm an honest seller, so I'm hoping a police report will prove my innocence to the bank. I'd never heard of this happening until it happened to me. Thanks again for the advice. I'll update so if it happens to any other businessmen here, we'll know what to do to prevent or counteract this trick from buyers.

[pod]

My being skeptical was not meant to be an insult. I just expressed not understanding a bank reacting this way to a single indecent. You never even touched the money so not sure why they are all freaked out. Take everything you have to bank but I would really try and deal with someone higher up at the bank.

[newageinc]

I found it odd too. Prior to this, I've had no issues with my bank. Researching after the incident, apparently (S/ u/ n/ t/ r/ u/ s/ t) won an award for their fraud prevention tactics. Fine, but it seems they are penalizing the victims as well to cover their losses.

Freezing an entire account in good standing, good history over one incident, is extreme. Apparently, they have a third party company that deals with their enterprise fraud management cases, and they've done such a good job of preventing fraud loss that they've won an award, but what about the customers who've done nothing wrong?

I didn't try to deposit a bogus paper check myself, all I did was unknowingly receive a bounced check wire. I always wait for complete clearance before I touch funds in the bank, or have the goods shipped, even if it shows up in my balance. I wait to make sure everything is good. In this case, within 2 days of it showing in my balance, things were not good and I'm hoping the bank and their new fraud team take this into consideration in my judgment.

Worse case scenario presented to me is, the bank says I'm in on this, close my account, they report to chexsystems and I can't open another bank. The thought of this penalty, for conducting legitimate business on my end while dealing with a illegitimate buyer, frightens me. I used to horde cash in hiding spots because I didn't trust the banks. I was convinced by others that I was crazy to do this, and decided to keep cash in the bank. Now I wish I still had my cash stashed. I feel wrongfully screwed.

[pod]

Prior to this, I've had no issues with my bank.
Freezing an entire account in good standing, good history over one incident, is extreme.
all I did was unknowingly receive a bounced check wire
they report to chexsystems and I can't open another bank

Can you run out and open an account somewhere in the mean time? If so, do it tomorrow

Good fraud security is great. But not at this extreme. Fight to clear your name and get your money unfrozen, but I would deal with another bank
And, dont take wires or checks. but I'm guessing you already have that one solid

[First Edition]

You had a wire come in on a personal account for 3k, I would have frozen your account too, honestly..... and considering the fraud on the other end...... consumers, most of them... it's just not normal to do wire transfers. It just isn't done.

I'm sure you're all going to argue with me on that one....

It's good you got the funds released. I would have had this person send a certified bank check, then no problems. This is what I do for transactions this large.

[GreenBean]

What exactly do you think the purpose of a bank FRAUD department is?

It's the BANK they are protecting first in the pecking order, then the customer.

Lessons: never have all eggs in one basket. ( Keep living expenses apart from ecommerce)
Never trust a buyer.
If you get offered a different manner of payment, ensure that it has a minimal chance of reversal because of fraud.

You might w2ant to make an appointment to see a senior person at the bank. Have your paperwork etc & get your story across to them. Hope you manage a speedy resolution

[newageinc]

Agreed, but I still say they should hold the amount in question, not the entire account. I had much more than $3K in the account for months. I wish the bank would think to themselves, 'this guy wouldn't jeopardize this amount, for only $3K'. It doesn't make sense. Give customers with good history and track record, the benefit of the doubt to some degree.

I will seek certified bank checks from now on. Thanks for the tip 1st Edition, but "I would have frozen your account too.." doesn't help me right now while I'm trying to budget food for the week and figure out my next move. Backup accounts a must, or back to my old ways, cash and stash.

[GreenBean]

They never ever do. Been like that forever. Foremost the bank wants to be on top of a (possible) fraud. You, as a customer are deemed guilty by association.

For down the track, when this is behind you, I suggest you try to find a personal manager at a bank. Seriously having a relationship does help in sticky times.

[rsot]

Whichever bank you deal with should be considered an ally so helps building strong relationship with them.

Investment, bank box, multiple accounts - all these help to build faith in you.

I had a check once bounce for 5k. Not like your situation but they did ask me from whom the check came from, etc. They didn't penalize me but of course, no funds given. Did not affect my account.

But all the posters in this thread have given solid advice. Sad to hear it happen.

[First Edition]

I've said it before, and I'll say it again...


Your relationships with your banking institutions will be directly proportional to your attitude in business

[luna]

Honestly one thing I find strange though: I worked for banks before and I can tell you something for sure: never ever will they give money out that they do not have. Any bank normally has a hold on cheques for at least 5-10 days unless the cheques are from well known businesses. Even than they verify with the bank the cheque is drawn on, if the customer wants immediate cash. for this phone verification placed by the bank the customer is normally charged as well. so I find it really weird that a wire transfer was issued based on a cheque deposit but this is only my opinion though.

[jeffweico]

Originally Posted by newageinc

Agreed, but I still say they should hold the amount in question, not the entire account. I had much more than $3K in the account for months. I wish the bank would think to themselves, 'this guy wouldn't jeopardize this amount, for only $3K'. It doesn't make sense. Give customers with good history and track record, the benefit of the doubt to some degree.

I will seek certified bank checks from now on. Thanks for the tip 1st Edition, but "I would have frozen your account too.." doesn't help me right now while I'm trying to budget food for the week and figure out my next move. Backup accounts a must, or back to my old ways, cash and stash.

You have to understand where the bank is coming from on this... They receive notice that there is potential fraud and your account is involved. So they need to investigate - but that takes time. They do not know at the outset if you are involved or not. They also don't know if it is just the $3k, or if that is just one of many fraudulent transactions. So, to limit their risk, they freeze the entire account until they can sort it out.

And GreenBean is absolutely correct when he advises that you have a relationship with your banker. If they knew you, or if you have a substantial loan with them - like a mortgage or a car loan - you would pose less of a risk in their eyes.

I don't think the bank is out to cause you undue hardship, they are just trying to protect their interests.