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Disappearing deposits: What happens when banks lose your money
February 12, 2018
9:35 pm
Loonie
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Thar's possible, Norman.
While CBC does have a legal dep't which vets items where they could be held liable, the journalist is not likely a lawyer and nay not be attuned to such distinctions in the liability of others.

We can't know about the timing, but it would not surprise me if there were delays in determining an effective route for complaint and in responses. As you know, the banking system has a ladder through which one must progress with complaints, which is not particularly obvious to people who are not familiar.

February 14, 2018
7:26 pm
Norman1
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There is also the possibility of miscommunication.

The actual suggestion to Robinson could have been to ask for another cheque from the buyer. The Scotiabank contact did not understand the lost cheques had been certified.

Robinson asked the buyer. Buyer went to her bank and her bank asked for a $21,000 indemnity bond for the lost certified cheques. That would have cost $400 to $700. sf-surprised

Buyer told Robinson that the bank wanted $400+ to replace the lost cheques! Robinson didn't believe that, knowing that stop payments are around $25 each. She thought the buyer was just trying to take advantage of her predicament. sf-frown

She waited, hoping that Scotiabank would find the lost cheques. Unfortunately, months later, the cheques were not found.

September 19, 2024
2:43 pm
Bill
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If you're selling a personal item to someone else, a stranger, for $50,000 what is the best way to accept payment? In 2024 is it still certified cheque? Thank you.

September 19, 2024
3:06 pm
kesa
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Bill said
If you're selling a personal item to someone else, a stranger, for $50,000 what is the best way to accept payment? In 2024 is it still certified cheque? Thank you.  

Bank Draft. The bank will debit account. Draft is payable by bank to payee. Certified is weaker/more prone to fraud.

September 19, 2024
3:29 pm
AltaRed
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I have also been told bank drafts can be counterfeit. What a local auto dealership does is to request that the bank employee who made out the draft attach his/her bank business card with a direct number to the draft so that the payee can call directly to validate the bank draft is for real before handing over the goods.

September 19, 2024
3:33 pm
HermanH
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As a former bank teller, I remember that there used to be a guaranteed procedure for cheque acceptance, if there was ever any question as to the authenticity of the instrument. I don't remember the exact terminology, but I think it was called something like 'Clearance'. We would accept the cheque, but then physically send it to the originating bank for clearance. They would then send the money directly from bank-to-bank and only then would it be deposited to the member's account and be available to them. This took a few weeks and would cost the member a few dollars, but it was the gold standard for guaranteed acceptance of funds.

September 19, 2024
6:45 pm
Bill
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Thanks. That's a good idea about the business card with the bank draft.

HermanH, taking a few weeks to verify all is well doesn't really work, neither party wants to be on hold for two weeks while funds are being verified. (And you talk about working in a bank and then refer to members, doesn't sound like a bank to me - ?)

September 19, 2024
6:47 pm
Norman1
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HermanH said
As a former bank teller, I remember that there used to be a guaranteed procedure for cheque acceptance, if there was ever any question as to the authenticity of the instrument. I don't remember the exact terminology, but I think it was called something like 'Clearance'. We would accept the cheque, but then physically send it to the originating bank for clearance. …

That sounds like sending a cheque for collection.

I don't think collection is foolproof either. The drawee bank can easily tell if there is not sufficient funds for the cheque, the account number is bogus, or the writer of the cheque is now deceased.

But, there are other reasons a cheque can be returned for that the bank can't easily detect.

September 19, 2024
6:52 pm
Norman1
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Bill said
Thanks. That's a good idea about the business card with the bank draft.

That's actually not a good idea. Someone who can counterfeit a bank draft with security features can easily print a business card that has no security features.

That's like calling the phone number on the back of a suspect Canada Post money order or suspect AMEX traveller's cheque to confirm its authenticity!

September 19, 2024
8:35 pm
AltaRed
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I suspect this particular auto dealer phones the general number for the bank and asks to speak to the specific employee. No one should take a business card at face value.

September 19, 2024
8:43 pm
HermanH
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Norman1 said
That sounds like sending a cheque for collection.

Yeah, that's what it was. Thx.

September 20, 2024
5:31 am
Bill
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Yes, naturally one would first call the bank and then be connected to the employee shown on the card.

September 20, 2024
9:35 am
SaverJunior
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Bill, if I were to receive a large sum of money from a buyer, I would request a bank draft or even cash from them. Meet the person at your bank at 10 a.m. on a business day.

Deposit the bank draft or cash with a teller who could verify no counterfeit right there. The teller will give you a deposit receipt and bear all consequences if any for the transaction. Then hand over the keys to the buyer.

Also the chance of someone robbing you inside a bank should be low.

September 20, 2024
1:45 pm
Bill
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Thanks, SaverJunior, that's a great idea. (I like to exercise in mornings, would 11 a.m. be ok? Just kidding!)

September 20, 2024
3:24 pm
JohnnyCash
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...and take some hired muscle with you.

September 21, 2024
8:30 am
Norman1
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SaverJunior said

Deposit the bank draft or cash with a teller who could verify no counterfeit right there. The teller will give you a deposit receipt and bear all consequences if any for the transaction. Then hand over the keys to the buyer.

Teller can only verify the cash. Teller won't be able to easily verify the bank draft unless it was issued by the same bank. No, teller won't take responsibility. Teller will accept the draft for deposit and put a five-day hold on it, like a regular cheque.

Those counterfeit Bank of Montreal money orders that were floating around town over 20 years ago were very good. A victim took one to a Bank of Montreal branch after it bounced and the teller said a mistake must have been made. It had all the expected security features of a genuine one!

Teller wasn't convinced it was a counterfeit until she tried to retrieve the money order's details using its serial number.

September 21, 2024
11:58 am
Bill
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So how would you do it, Norman1, if you were selling a physical good for $50K to a stranger (imagine you were, if it's something you wouldn't norman-ly do)?

September 21, 2024
1:08 pm
SaverJunior
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Norman1 said
Teller won't be able to easily verify the bank draft unless it was issued by the same bank.   

There are security features built-in with a bank draft. Teller can check those and as well call up the issuing bank shown on the draft to verify authenticity before deposit.

Alternatively, meet at buyer's bank which issued the draft. If the draft is genuine, you can cash the draft (all $50K if you want) since you are at the issuing bank. Or just deposit it if you so happened have account with that bank.

Bill, if you are selling your Porsche sf-wink, watch this and beware.

September 21, 2024
2:26 pm
Doug
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Norman1 said
Car buyer likely refused initial request to give another $21,000 certified cheque after his/her bank asked for indemnity for the lost $21,000 of certified cheques. An indemnity bond would have cost 2% to 3% or $400 to $600.

Not exactly and unlikely. As both a former bank employee and a bank customer, I have never seen, or been asked, to purchase an indemnity bond by a Canadian financial institution. It's always just an indemnity form the customer signs with their financial institution.

September 21, 2024
5:56 pm
Bill
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Thanks, SaverJunior, another good idea.

No Porsche involved so I should be safe. I'd seen that video before and what amazed me was the guy popped up like he was a cartoon character, must have been full of adrenaline, pretty sure that would have been the end of me!

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