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Home >> Checks/Money Orders >> Checks You Received
CU Verifies Check, Then Reverses: I'm Stuck!
I received a check for several thousand dollars. My credit union put the usual hold on the funds until the check cleared. After the designated time, I called to check and was told the funds were available. I withdrew and spent nearly $1000. Five days later, the credit union called and said the check was fraudulent, and I owe them the money I withdrew. I have been unemployed for four years, and I don't have the money. They say I have sixty days to repay, but after five days they started charging me $5 per day. It doesn't seem right that I am responsible for their mistake. What can I do?
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 The credit union didn't make a mistake. It told you the funds were available because the hold it had placed on your deposit expired. That did not mean that the credit union had received an all clear from the bank on which the check was drawn. Check clearing doesn't work that way.
There are legal limits on the duration of holds that the credit union can place against deposited checks. In some cases, the deposited checks come back unpaid after those holds have expired. The depositing customer, who got credit for the deposited check amount earlier, gets that credit reversed. That's the case even if the customer (or member, in this case) has been given access to the funds and has withdrawn some or all of them.
As you have described the situation, it seems likely that you ought to have been suspicious of the check in the first place. Where did it come from? Did you sell something to a stranger? Did you get some kind of unexpected windfall? Whether or not that's the case, your gripe is with whoever gave you the fraudulent check, not your credit union. You are the victim, and we are sorry that's the case, but the credit union is not the villain.
Published on BankingQuestions.com 10/13/09
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