The victims were scammed anyway.
Here's the way it works. A potential client in another country contacts a law firm asking for help collecting a debt. The firm takes the case, and shortly thereafter, they receive a check from the debtor for the full amount. The client tells the law firm to deposit the check into the law firm's bank account then wire to the client the amount of the first check less the law firm's fee. The law firm complies, but that check from the debtor was hot. So the law firm is out whatever they paid to the scamming client. See page 17 of the IC3 2011 Internet Crime Report.
That scam has been going on since at least 2007, and the news is that law firms were so quick to wire money before determining whether the bogus checks cleared. But here's the twist. There are some cases in which the law firms did ask. And in a case in New York state a banker told the lawyer that the check cleared and that the funds were available. The law firm acted on that information, but the check was no good. The law firm sued the bank and lost with the NY appellate court holding that "cleared" was an ambiguous term. See Greenberg, Trager & Herbst, LLP, Appellant, v HSBC Bank USA et al., Respondent.
GTH's claim{**17 NY3d at 580} is based on the alleged oral statement by the HSBC representative that the check had "cleared"—an ambiguous remark that may have been intended to mean only that the amount of the check was available (as indeed it was) in GTH's account. Reliance on this statement as assurance that final settlement had occurred was, under the circumstances here, unreasonable as a matter of law.
Ouch, that must have hurt. Via via via.
Closer to home, a similar scam can target everyday sellers. LooksTooGoodToBeTrue.com gives us this advice:
IF YOU ANSWER “YES” TO ANY OF THE FOLLOWING QUESTIONS, YOU MAY BE GETTING SCAMMED!
Are you about to cash a check from an item you sold on the Internet, such as a car, boat, jewelry, etc?
Is it the result of communicating with someone by email?
Did it arrive via an overnight delivery service?
Is it from a business or individual account that is different from the person buying your item or product?
Is the amount for more than the item’s selling price?
What's missing is a way to determine whether the check really did clear. It's a jungle out there. Best to ask for a money order and hope it isn't counterfeit.
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