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Home >> Checks/Money Orders >> Money Orders
International Mix-up at the Bank
I received three international money orders from a person I didn't know. I was selling personal property. The person gave me three money orders for $950 each. They were payable through a bank in Delaware. I deposited them on 7-16-08. I told the person I would not release my property until I knew they cleared. I gave him a receipt.
Two days after I deposited the money orders, he called me, cancelling the transaction. I told them I deposited the money orders already and I couldn't give them back. They would have to wait until they cleared. They kept calling me for their money.
I went into the bank on 7-22-08 to see if the funds cleared. The cashier told me that the funds were available, so I withdrew the money and paid it back to the purchaser. The very next day, I learned that my account was overdrawn by $2260. It so happened that the day I withdrew the money, the bank processed all three money orders as return items. They had them in their possession on the 21st, and no one posted the money out.
Now they are saying I am the one responsible for the negative balance because I was the one that deposited them. Do I have any legal right? The bank did not do their part. The minute they knew about those money orders, they froze the monies to make sure they didn't take a loss. My account has never been a strong account. Do I have any legal grounds to fight them on this?
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 You were victimized by scam artists, and it's not the bank's fault you lost money. Unless your bank knows that there is something wrong with money orders it accepts for deposit, it has to make funds available from them according to a schedule that is only loosely based on the time it takes for them to reach the banks they are drawn on and make the return trip if they aren't paid.
The law is clear. You were responsible for the money orders you deposited, even though your bank had given you access to the funds and you withdrew the money. Its not possible to say when the bank was in a position to know that the money orders were returned and that you deposited them. It's likely that the department of the bank that handles returns deposits had not yet charged them back to your account when you withdrew the funds.
The scam artists you dealt with counted on your sending them back the money before your account was charged. That's why they kept calling you -- to get you riled up enough to act sooner than you might otherwise. The bank did not err here. You got sucker-punched when you trusted the strangers who sent you the money orders.
Published on BankingQuestions.com 8/18/08
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