Counterfeit Cashier’s Check Scams: Is the Consumer Out of Luck?

[regic]

The latest consumer scam involves an interesting combination of legal issues, cutting across payment systems and consumer law. The scam takes many forms and is very widespread, but basically involves a counterfeit cashier’s check.

Thief gives consumer a large cashier’s check, telling consumer to cash it, keep a part for himself, and send the rest to the thief. It is often used in connection with automobile sales or apartment rentals...

The legal issue is whether the consumer is out of luck. A quick review of relevant law suggests he or she is. Under our payment laws, the check has not been “paid” and if it is returned the loss falls on the consumer. The consumer, however, may have several ways to throw the loss on to one of the banks...

full article: http://pubcit.typepad.com/clpblog/2006/1...t_che.html