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How to deal with the Credit Union that closed my account?
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Author:  pterry [ Sat Jan 12, 2008 9:55 pm ]
Post subject:  How to deal with the Credit Union that closed my account?
My son was a victim of a cashiers check scam trying to sell his dirt bike on Craig's List. I have spent a couple of hours looking through this forum (it's great) and gotten a lot of very good info.

The scam took place mid November - we have the western union records and a copy of the processed cashiers check that he cashed at the CU. My son only had $750 in his CU account and the check was for $4000.

He noticed online on his CU accout after he got $3500 cash that the cashiers check was on hold so he waited until he thought it had cleared, then he wired the money. He had no idea that he was being scammed.

My son wired a total of $3500, so he has a negative $2700 in his account which the CU closed.

The CU is demanding the $2700. My son opened a checking account at another bank. He also filed a report with the County Sheriff.

He did get a letter dated 11/23 from the CU loss prevention department saying that if he didn't respond within 10 days they may "exercise any and all rights afforded by the laws of the State of Texas and the checks may be filed with the local law enforcement for prosecution."

Subsequently, he received a couple of "Adverse Action Notices" from the CU that said his account was closed because of poor credit performance with them.

He has an outstanding auto loan with the CU that he is still paying.

I'm in the process of helping him write his story and submiting it to all the places recommended, but what is the best way to communicate with the CU. He doesn't have the money to pay the $2700.

Appreciate any advice. Thanks so much for this website.
Author:  admin [ Sun Jan 13, 2008 11:22 am ]
Post subject: 
When we were going through a similar thing, we wrote a letter to our bank telling them that we did not feel that we were liable and why. We had to set up a payment plan to keep our good credit, but we put in the letter that we were only making payments to keep our good credit and it was not an admission of liability on our part and we were planning to fight this.

I would also contact the Attorney General's office in your state and the Department of Justice.

You might want to search out information on the Midnight Law to see if that could help your case. This basically says that the bank has 24 hours, or until midnight the following day, from the time they find out that the check is counterfeit to notify you. If they did NOT notify you in a timely manner you could state this information in your letter to the bank also and site the Midnight Law information.

You may want to look at getting a lawyer. The amount we ended up paying our lawyer was still MUCH better than the thousands we COULD have been out due to the scam.
Author:  pterry [ Sun Jan 13, 2008 11:34 am ]
Post subject:  Dealing with the credit union
Thanks for the info. Thank goodness we have prepaid legal which we can at least get an attorney's take on it for advice at no cost.

Could they arrest my son if he doesn't pay the debt? It looks like they are just going to put a mark on his credit that would stay on their for 7 years.

Should we send the same letter telling his story to the credit bureaus?
Author:  admin [ Sun Jan 13, 2008 11:40 am ]
Post subject: 
If they tried to arrest your son it would be for trying to defraud a financial institution, not for not paying the money back.

I am going to PM you some additional informaiton. Give me two minutes.
Author:  admin [ Sun Jan 13, 2008 12:06 pm ]
Post subject: 
If they acutally go through and put the report on his credit record, then yes, send the credit bureaus the letter too.

I sent you some information via PM . . . let me know if you have any questions.
Author:  reverse [ Mon Jan 14, 2008 11:02 am ]
Post subject: 
admin wrote:
When we were going through a similar thing, we wrote a letter to our bank telling them that we did not feel that we were liable and why. We had to set up a payment plan to keep our good credit, but we put in the letter that we were only making payments to keep our good credit and it was not an admission of liability on our part and we were planning to fight this.

I would also contact the Attorney General's office in your state and the Department of Justice.

You might want to search out information on the Midnight Law to see if that could help your case. This basically says that the bank has 24 hours, or until midnight the following day, from the time they find out that the check is counterfeit to notify you. If they did NOT notify you in a timely manner you could state this information in your letter to the bank also and site the Midnight Law information.
You may want to look at getting a lawyer. The amount we ended up paying our lawyer was still MUCH better than the thousands we COULD have been out due to the scam.


The Midnight law pertains to the bank that is the paying bank, not the bank you presented the check to. Big difference, the midnight law does nothing to protect the person who receives the check, it is meant to protect the party that the check is drawn upon. You have to realize that checks, if not done in check 21 fashion take some time to process, sometimes up to 7 business day, for the most part any hold your bank or CU may have placed on a check will have expired.

What CU are you dealing with in Texas, I know some Texas CU people.
Author:  pterry [ Mon Jan 14, 2008 11:16 am ]
Post subject:  Credit Union is SACU
I am not clear about the Midnight Law. So it would not apply to SACU which is who gave my son the cash?
Author:  admin [ Mon Jan 14, 2008 1:21 pm ]
Post subject: 
I first heard of the midnight law when reading the story at the link below

http://www.goodthink.com/writing/view_s ... &page_id=2

quote from story:
Quote:
Again the teller keyed in my account number. Then she said, "$95,093.35 deposited on May 21st. You're safe to spend that money now because that check can no longer be returned. Depositors are protected by a law that says checks cannot be returned after 10 business days."


I swear that years ago someone also told me that the bank had 24 hours to tell the customer when a check comes back as counterfeit. . . . :?
Author:  reverse [ Mon Jan 14, 2008 3:24 pm ]
Post subject: 
admin wrote:
I first heard of the midnight law when reading the story at the link below

http://www.goodthink.com/writing/view_s ... &page_id=2

quote from story:
Quote:
Again the teller keyed in my account number. Then she said, "$95,093.35 deposited on May 21st. You're safe to spend that money now because that check can no longer be returned. Depositors are protected by a law that says checks cannot be returned after 10 business days."


I swear that years ago someone also told me that the bank had 24 hours to tell the customer when a check comes back as counterfeit. . . . :?


The check will not even reach the paying bank in 24 hours..............

The paying bank has till midnight on the day they receive the check to send it back through the system, if they pay the check, the person that the check is drawn upon will not be at a loss the bank will be. It protects the person that the counterfiet is drawn upon.

If I deposit a check in South Texas, it takes a day for it to be processed at the bank, it is then sent out to the Fed in Dallas, that takes a day. The check is drawn on a credit union in Washington State, it takes the check at least 2 days to get there. They then, after four days, have the right to refuse the check by midnight,. They reject the check send it back to the Fed, two more days, then one day back to my bank. That check was returned by midnight on the day it was received, at the paying bank. I did not receive the check back for 7 business days..............


Does that example clarify the system?

Basically the midnight rules states that the paying bank must return the check in the system on the day it receives it, if they do not return it on that day, the bank is responsible for paying the counterfeit. But the whole process can take up to 10 days or maybe more.
Author:  reverse [ Mon Jan 14, 2008 3:29 pm ]
Post subject: 
I read that link you posted, that is so far from the truth it is pitiful. There is no 10 day law, the Midnight rules is something different. I have seen checks returned 3 months later.

Please do not believe everything you see on the internet, you may end up in jail.
Author:  reverse [ Mon Jan 14, 2008 3:32 pm ]
Post subject:  Re: Credit Union is SACU
pterry wrote:
I am not clear about the Midnight Law. So it would not apply to SACU which is who gave my son the cash?


It applies to the bank which the check was drawn on. What bank issued the check your son received? After the check gets to the paying bank, which may take 4 days, as in the example mentioned, they have till midnight toireject it. Then they send the check back through the system, 4 more days, and then SACU receives the check and charges back your son's account.

8 business days...............

Sound about right?
Author:  admin [ Tue Jan 15, 2008 12:14 pm ]
Post subject: 
Thanks for clearing things up . . . at least I think that they are cleared up. :?

So maybe I was mixing up the Midnight Law with something else . . . is there something that says how long the depositing bank has to notify the customer once THEY know the check is counterfeit?
Author:  reverse [ Tue Jan 15, 2008 3:15 pm ]
Post subject: 
admin wrote:
Thanks for clearing things up . . . at least I think that they are cleared up. :?

So maybe I was mixing up the Midnight Law with something else . . . is there something that says how long the depositing bank has to notify the customer once THEY know the check is counterfeit?


If the bank charges your account back the day they receive the counterfeit, you are not getting anymore money out of that account, they will freeze it. So, in essence, what difference does it make if they call you or send you a letter? Not trying to be smart, but your account will be shut down as soon as the counterfeit is returned against your account.

Notifying you by phone would be nice, but it does not put you, the consmuer, in a better position.

See what I mean?
Author:  admin [ Wed Jan 16, 2008 1:31 pm ]
Post subject: 
yes, I do see what you mean . . . obviously I had bad information before, since the person that told me how the Midnight Law worked before said that banking customers could use that in their case (if the bank did not notify them within the right amount of time then there was something that the bank did wrong and that would mean a way to turn things around and try to hold them liable for the money)

I guess this just shows that you learn something new every day.
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