I'm sorry to say but this isn't a Chase specific problem. Chase is required by law to make the funds available after a couple days, just like all other banks. The OP's sister fell for a common scam that's been going on since forever, and Zelle warns you fairly explicitly to never send money to a stranger or else things like this could happen.
Of course Chase isn't going to eat a $3,000 loss because a customer fell for a common scam and ignored Zelle's warnings and didn't even do a cursory look through the bank agreement which clearly explains how checks clear.
The difference between the other services "taking responsibility" and "not shaking down their customers" and Chase Bank is that unlike a checking account, credit card transactions can be easily reversed. Once you send the money through Zelle, it's gone.
That your sister was victimized is clearly terrible, but it doesn't change the fact that her negligence caused her bank to lose 3 grand, and your father is liable as a cosigner as well. She is reasonably expected to recognize that Craigslist arrangement as too good to be true, and she ignored Zelle's admonitions not to send money to strangers.
Ok but part of the reason people lower their skepticism is because they see their bank’s UI heavily implying that the check has cleared. The main point of the post is that banks’ UI about whether a check has cleared is very misleading and really needs to be changed.
Just because the law forces them to make the money available doesn't prevent them from putting a big warning on the associated transaction.
Clearly, the bank knows how cheques work and how they can bounce 6 months down the line. They should make it clear to the user with a warning explaining "we are required to make this money available to you by law now, but this money can be taken back at anytime if the cheque ends up being fraudulent, and this can happen for up to 6 months down the line".
The bank also knows (doing otherwise would make me doubt their competence to operate a bank) that this is a common scam and should similarly warn their customers about it. They also know (and have the data) to prove that a lot of people fall victim to this scam suggesting that there is a lack of knowledge in the majority of people when it comes to how cheques work and how they can bounce down the line after the money has already "cleared".
Finally, when it comes to the law, the law was most likely drafted at a time where 1) there were no easier ways to transfer money instantly while making sure it's actually legitimate, so it was a necessary trade-off and 2) there were similarly no easy ways to irreversibly transfer money out of the country in an untraceable fashion, so that the majority of occurrences of such scams would also give better chance to law enforcement to actually trace the funds and make the victim whole, so the fact that someone could temporarily end up out of pocket was also not a big deal.
Nowadays that particular law is clearly inadequate and is doing more harm than good, but laws take time to change (and no doubts there are vested interests at play that would want the system to remain as-is) and there's nothing preventing the banks doing their own part to "patch" the bug until a proper fix can be installed (by deprecating the whole cheque system altogether).
While all of these things may be true, how does this stop Chase from implementing a new cheque status?
This scam is so incredibly common and effective that I think we have to move beyond blaming individuals for making a mistake, and consider implementing a fairly simple safeguard.
It depends on what the definition of stranger is. At the point she sent the money she had entered a relationship as an employee. Granted, it was a new relationship, I think it is easy for most people to now think of this entity as no longer a stranger -- even though they probably should.
As noted in a below thread, the solution can still be to make the funds available, but to note clearly that the actual funds may not really be there.
As you note, this scam has been going on forever, and some simple UI changes could make it harder to execute, while not hindering the common case (non-scam).
True, but--the bank should communicate clearly when the check has cleared, and display an intermediate icon that says "per the law/policy, you are allowed to access these funds now, but payment processing is not complete. if the payment does not clear, you must repay these funds."
Also, if the bank really wanted to help, they could offer the services of its fraud unit in attempting to identify and have the check writer prosecuted.
Honestly, it's time to kill checks. They have no place in today's world and can only cause problems.
I get what you’re saying, but the main complain I have is that Chase gave no indication that the funds were not guaranteed once the check appeared to have cleared
The law only forces them to make the funds available, not to pretend that that funds cannot be reclaimed
If the true status of the check had actually been made visible, then yes, Chase would have a much stronger position to claim their was irresponsible
No, the bank fell for the scam. They cleared the fraudulent check. But their TOS says their customers are on the hook for mistakes made (and hidden - there's no way to tell if a transaction really cleared) by the bank.
This is such a common scam that I really think it should be taught in schools.
Whenever you hear someone propose to give you a check in return for you depositing your cash directly somewhere, it is always a scam, always. There is no legitimate reason anyone would ever do this, and I've seen it happen multiple times to multiple people, and even to small charity organizations that almost went bankrupt because of this.
We need some sort of anti-scam class in like high school or something. Just the ability to recognize the most common scams in the world would protect a lot of people.
The other huge bright red, klaxons-blazing warning sign is the overpaying part. There is literally no reason at all to overpay for something when you are writing a check. It’s a psychological trick, like the door-to-door sales trick of giving someone a bottle of soap so that the mark feels like they owe something to the salesperson/scammer (or they are getting one over on the scammer), just a ploy to exploit human emotion.
Yeah, this whole thing seems almost impossible with SEPA bank transfers since the order is the other way round.
The sender tells their bank to send someone money, the bank checks the sender's funds and notifies the receiver's bank of the transfer, then the receiving bank notifies the receiver they got the money.
This whole thing used to take 2-3 days in the days of paper giros, but it's pretty much instantaneous now.
> Chase customer support had one clarification to make. I'd originally said it might take, weeks for the check to clear, but the explained it could actually take more than six months. And you'll have no idea when that magic moment occurs.
Good lord, I had no idea this is how bad things are. Haven't used checks in a long time and happy I haven't. The privacy trade-off for cards is concerning but the convenience is hard to give up.
The real answer is to reform how checks are processed. With the interconnectivity that exists between banks today, there is zero reason (other than laziness on the part of banks) to have a delay of weeks or months to confirm funds availability.
Frankly no bank will display this data voluntarily, because in being transparent, it would gain a reputation as a less reliable place to deposit checks than other banks - customers would shoot the messenger. This is exactly the type of thing a “Surgeon General’s Warning” regulation/law could enforce, and sidestep the prisoner’s dilemma here. But absent regulation I doubt this will ever become common knowledge.
This is really a problem with the US banking system as a whole, the check-prevalent culture where people are still willing to deal with such ancient financial instruments, plus the US society where people live paycheck-to-paycheck.
When you do an ACH pull or a check deposit, it generally takes several days or even weeks for the transaction to clear. (But when you do an ACH push or Zelle, the transaction may be irreversible.)
Would you be OK if your bank waited a week or two until clearing the check? Or the banks getting rid of the whole idea of personal checks?
When I saw the title, my first thought was that banks’ janky non-standard and often-changing login flows make it easier for sloppy phishing attacks to work.
Coincidentally, my son was recently scammed on Roblox with a similar scam. And what's crazy is that Roblox seems unwilling to fix it, or to rectify the situation, even though the complete paper trail is in their system and all of the currency/items are within their system. They could easily reverse it, like credit card companies do.
It's amazing how little effort these institutions put into trying minimize damage to good customers.
I’m sure similar scams existed long before the advent of online banking. I wonder what warnings, if any, existed back in the days of paper and pen? Bad checks were much more common decades ago and I think people were more wary.
Younger people don’t have the same knowledge about checks. Banks are outdated in their assumptions of consumer knowledge. But I also think a certain level of common sense also applies here.
The real scandal here is that anyone is still using checks at all. Maybe we should be talking about why the US banking system is so far behind the rest of the developed world.
I live in the EU and I don't think I've seen a check for about 15 years.
[+] [-] LurkersWillLurk|5 years ago|reply
Of course Chase isn't going to eat a $3,000 loss because a customer fell for a common scam and ignored Zelle's warnings and didn't even do a cursory look through the bank agreement which clearly explains how checks clear.
The difference between the other services "taking responsibility" and "not shaking down their customers" and Chase Bank is that unlike a checking account, credit card transactions can be easily reversed. Once you send the money through Zelle, it's gone.
That your sister was victimized is clearly terrible, but it doesn't change the fact that her negligence caused her bank to lose 3 grand, and your father is liable as a cosigner as well. She is reasonably expected to recognize that Craigslist arrangement as too good to be true, and she ignored Zelle's admonitions not to send money to strangers.
[+] [-] Liron|5 years ago|reply
[+] [-] Nextgrid|5 years ago|reply
Clearly, the bank knows how cheques work and how they can bounce 6 months down the line. They should make it clear to the user with a warning explaining "we are required to make this money available to you by law now, but this money can be taken back at anytime if the cheque ends up being fraudulent, and this can happen for up to 6 months down the line".
The bank also knows (doing otherwise would make me doubt their competence to operate a bank) that this is a common scam and should similarly warn their customers about it. They also know (and have the data) to prove that a lot of people fall victim to this scam suggesting that there is a lack of knowledge in the majority of people when it comes to how cheques work and how they can bounce down the line after the money has already "cleared".
Finally, when it comes to the law, the law was most likely drafted at a time where 1) there were no easier ways to transfer money instantly while making sure it's actually legitimate, so it was a necessary trade-off and 2) there were similarly no easy ways to irreversibly transfer money out of the country in an untraceable fashion, so that the majority of occurrences of such scams would also give better chance to law enforcement to actually trace the funds and make the victim whole, so the fact that someone could temporarily end up out of pocket was also not a big deal.
Nowadays that particular law is clearly inadequate and is doing more harm than good, but laws take time to change (and no doubts there are vested interests at play that would want the system to remain as-is) and there's nothing preventing the banks doing their own part to "patch" the bug until a proper fix can be installed (by deprecating the whole cheque system altogether).
[+] [-] superhuzza|5 years ago|reply
This scam is so incredibly common and effective that I think we have to move beyond blaming individuals for making a mistake, and consider implementing a fairly simple safeguard.
[+] [-] kenjackson|5 years ago|reply
As noted in a below thread, the solution can still be to make the funds available, but to note clearly that the actual funds may not really be there.
As you note, this scam has been going on forever, and some simple UI changes could make it harder to execute, while not hindering the common case (non-scam).
[+] [-] morpheuskafka|5 years ago|reply
Also, if the bank really wanted to help, they could offer the services of its fraud unit in attempting to identify and have the check writer prosecuted.
Honestly, it's time to kill checks. They have no place in today's world and can only cause problems.
[+] [-] ZainRiz|5 years ago|reply
The law only forces them to make the funds available, not to pretend that that funds cannot be reclaimed
If the true status of the check had actually been made visible, then yes, Chase would have a much stronger position to claim their was irresponsible
[+] [-] rbecker|5 years ago|reply
No, the bank fell for the scam. They cleared the fraudulent check. But their TOS says their customers are on the hook for mistakes made (and hidden - there's no way to tell if a transaction really cleared) by the bank.
[+] [-] tomca32|5 years ago|reply
Whenever you hear someone propose to give you a check in return for you depositing your cash directly somewhere, it is always a scam, always. There is no legitimate reason anyone would ever do this, and I've seen it happen multiple times to multiple people, and even to small charity organizations that almost went bankrupt because of this.
We need some sort of anti-scam class in like high school or something. Just the ability to recognize the most common scams in the world would protect a lot of people.
[+] [-] xnyan|5 years ago|reply
[+] [-] srtjstjsj|5 years ago|reply
[+] [-] adrian_mrd|5 years ago|reply
Most western countries have moved away from checks - with the exception of bank cheques or money orders for certain, specific cases.
[+] [-] kochthesecond|5 years ago|reply
[+] [-] ginko|5 years ago|reply
The sender tells their bank to send someone money, the bank checks the sender's funds and notifies the receiver's bank of the transfer, then the receiving bank notifies the receiver they got the money.
This whole thing used to take 2-3 days in the days of paper giros, but it's pretty much instantaneous now.
[+] [-] ZainRiz|5 years ago|reply
That said, getting rid of checks completely is a much harder social challenge than updating the UX to show the right status.
UX updates are a practical recommendation that a few engineers at a bank could actually implement
[+] [-] WilTimSon|5 years ago|reply
Good lord, I had no idea this is how bad things are. Haven't used checks in a long time and happy I haven't. The privacy trade-off for cards is concerning but the convenience is hard to give up.
[+] [-] morpheuskafka|5 years ago|reply
A check literally has your full address and bank account number on it.. doesn't get much worse for privacy.
[+] [-] ayende|5 years ago|reply
Marking the funds as unavailable would cause great issue for people using checks. For example, a rent check would only be good on six months?
Who would accept this? The law was initially written to protect consumers from having their money unavailable
[+] [-] thibautg|5 years ago|reply
- Pending
- Pending with funds available
- Cleared
[+] [-] alistairSH|5 years ago|reply
[+] [-] btown|5 years ago|reply
[+] [-] cnst|5 years ago|reply
When you do an ACH pull or a check deposit, it generally takes several days or even weeks for the transaction to clear. (But when you do an ACH push or Zelle, the transaction may be irreversible.)
Would you be OK if your bank waited a week or two until clearing the check? Or the banks getting rid of the whole idea of personal checks?
[+] [-] Liron|5 years ago|reply
[+] [-] kenjackson|5 years ago|reply
It's amazing how little effort these institutions put into trying minimize damage to good customers.
[+] [-] srtjstjsj|5 years ago|reply
[+] [-] danielfoster|5 years ago|reply
Younger people don’t have the same knowledge about checks. Banks are outdated in their assumptions of consumer knowledge. But I also think a certain level of common sense also applies here.
[+] [-] jivings|5 years ago|reply
I live in the EU and I don't think I've seen a check for about 15 years.
[+] [-] jszymborski|5 years ago|reply