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Home >> Scams/Fraud
Won the Lottery, Cashed the Check, Now it's Fraud?
I recently got a letter saying that I won a lottery sweepstakes. In the letter was a check that I deposited in my checking account. The next day I paid off all of my credit card debt with the money from that check. Today I find out that this might be a scam. As far as I know, the check has cleared, but it's only been three days.
Is it still possible for that check not to clear? How much time does it take for a check to officially be cleared so that I can start spending the money and not have to worry if it is legit or not? If it is a fake, will the bank cover me or will I be bouncing checks all over to my credit card companies?
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 Three days is not enough time for the check to clear. It depends on where you deposited the check, and where it has to go to be paid. Your bank may have given you credit, but that doesn't mean the check is good.
The check will travel back to the bank from which it was drawn. There, it will be reviewed and if it is a fake, they'll return it to your bank who will want their money back from you. Your bank may or may not work with you. Their only obligation is to get the money back. Some banks will review your overall relationship and based on that and the amount of the check, they'll accept payments or they may want it all back, right away. The choice is theirs.
Especially if you didn't enter this lottery in the first place, you should speak with your banker and ask them for advice. You might be able to stop payment on the checks you sent out and tell the credit card companies what has happened. You may be able to reduce your loss this way.
Published on BankingQuestions.com 3/09/07
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