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Somebody I know asked to deposit money into my checking account so I could withdraw the money and let the person avoid their ATM fee (we have different banks). I am uncomfortable with doing so. However, I am not sure of the exact reason(s) why this could be bad for me. Are there any?

I know the person a good bit. I do not know their address or the amount of money.

TG01
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TryingToTry
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    How well do you know this person? – kponz Nov 09 '17 at 17:53
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    How much money is involved? $25 or $2500? – RonJohn Nov 09 '17 at 17:54
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    Also, please add a country tag? – RonJohn Nov 09 '17 at 17:54
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    Do you know this person well enough that you can go to their house and demand repayment when their deposit into your account bounces after a few days ... ? – brhans Nov 09 '17 at 18:01
  • I know the person a good bit. I do not know their address or the amount of money. – TryingToTry Nov 09 '17 at 18:40
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    "I do not know their address or the amount of money." It's a scam. – RonJohn Nov 09 '17 at 18:44
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    I think this person thinks they know you better than you know them. And I think this person thinks you're a sucker and wants to steal money from you. – brhans Nov 09 '17 at 19:06
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    I'd encourage your friend to open a bank account that doesn't charge fees for using ATMs and reimburses fees charged by ATM owners, meaning you can use literally any ATM for free. One can also find many low or fee-free ATMs if you know where to look. – josh3736 Nov 09 '17 at 23:23
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    @brhans : even in the case you waited to confirm that the check doesn't bounce, you could be scammed. The money might not come from an account that person is authorized to use. Maybe it belongs to someone else whose credentials were stolen. When the owner notices it and reports it to the bank or to the police, they track the stolen money to the you. – vsz Nov 10 '17 at 07:20
  • I thought most ATMs only charge a fee if you're using them to deposit or withdraw from a different bank. – Barmar Nov 10 '17 at 07:27
  • If it's a large check, many banks won't make the money available for withdrawal until the check has cleared. – Barmar Nov 10 '17 at 07:27
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    No idea how it is in US, but in many European countries it would constitute an 'invalid deposit' and be a (minor) offence. You are allowed to store on your bank account only the money that belongs to you, even temporarily... –  Nov 10 '17 at 12:05
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    "I know the person a good bit" A friend from school? An ex? Someone you've chatted with on Facebook for 3 years but have never met or talked too over the phone? I'm sorry, but "a good bit" is open to a wide interpretation... and none of that answers a simple question: Why doesn't your friend open an account at "your" bank? – WernerCD Nov 10 '17 at 12:36
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    @RonJohn - '"I do not know their address or the amount of money." It's a scam.' - that's not neccessarily true, I don't know the addresses of many of my friends, yet I'd still be willing to cash a check for them. (up to a limit, $100 - $1000 depending on the person). More than once I've something similar when out with friends and not near his/her "free" ATM, so I've withdrawn money and they Paypal'ed to me later. – Johnny Nov 11 '17 at 17:56
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    @Johnny the OP is sufficiently nervous about this Somebody I know (not even necessarily a friend) to have asked. That raises a red flag. – RonJohn Nov 11 '17 at 18:02
  • @9ilsdx9rvj0lo not really, as the person making the bank transfer could just claim it is a donation. Later on you could decide to donate an equal amount of money to this person (probably paying cash). I am NOT saying it's a good idea, just that I don't see how one could prove an offence here. – Andrea Lazzarotto Nov 13 '17 at 01:07
  • @AndreaLazzarotto normally it's not enough to claim it is a donation, donations are taxable income... but well, the whole case looks like a terrible idea anyway... –  Nov 13 '17 at 09:49
  • It does feel like US banking is centuries behind the rest of the world. – Strawberry Nov 13 '17 at 10:07
  • @9ilsdx9rvj0lo donations are not taxable in Italy. I can't tell about each and every other EU country. – Andrea Lazzarotto Nov 13 '17 at 10:12

5 Answers5

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This is dangerous as it is a typical a scam. Trudy convinces Bob to help her avoid an ATM free or some other pretense. She writes Bob a check for $100, but is willing to take only $80 to return the favor. Bob agrees.

Bob deposits the check, gives Trudy the $80 and then later finds out the check is bad. In most cases Bob will not be able to find or contact Trudy.

However, in some rare cases if Trudy feels Bob is very gullible, she will do the same thing again and again as long as Bob allows. Sometimes the amounts will increase to surprisingly high levels.

Pete B.
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    Is there a similar time lag for electronic deposits? – TryingToTry Nov 09 '17 at 18:36
  • There's a lag, but it's shorter. – RonJohn Nov 09 '17 at 18:45
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    Trudy's bank must really suck for having a 20% ATM fee. Most banks have it between 0 and 0.5%. – vsz Nov 10 '17 at 07:15
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    If you have to care about avoiding ATM fees, chances are the withdrawal is small enough that the minimum fee is a substantial portion. This is a massive problem especially for welfare recipients in the US. – Simon Richter Nov 10 '17 at 11:28
  • @vsz I'm American and haven't really done ATM's recently (Years?) but they normally have a set fee - say $5. The % on that depends on if you withdraw $20... or $200. (20% fee vs 2% fee). What really gets you is doing many $20 withdraws a week instead of a single $100 withdraw ($25 in fees for 5x$20 withdraws vs $5 fee for 1x$100 withdraw) – WernerCD Nov 10 '17 at 12:39
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    @vsz Agreed. ATM fees are easily avoided by other means. Buy a pack of gum or soda at the grocery store. Get $50 cash or whatever limit. You could even return the item. Greed is the underlying factor. All Bob is thinking about is the quick $20 he can earn and logic goes out the window. – Pete B. Nov 10 '17 at 13:11
  • @WernerCD How do you avoid ATMs? Do you live entirely cashless? I thought that was still hard in the USA, in particular for things like tipping. – gerrit Nov 10 '17 at 15:04
  • @Gerrit Direct Deposit from work to checking/savings, auto/manual payments from checking to bills/credit cards and "plastic". For "cash" (always nice to have a little money on hand) I normally end up with just enough side money (IE: fix your computer for $40 cash) to never really need to hit ATMs. So I'm not entirely "cashless" - but, unless I go out of my way (IE: State Fair where its still not guaranteed "booths" have card readers), I normally spend at most $100 in cash a month. – WernerCD Nov 10 '17 at 15:08
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    The money may be real, but obtained illegally and traceable to that bank account (which may not be theirs). The person who transfers the money to you makes a trail that ends with you cashing money that isn't yours from an ATM and "giving it to a friend" – BlackThorn Nov 10 '17 at 19:43
  • Couldn't Bob just wait until the $100 is credited to his account? – Masked Man Nov 11 '17 at 17:02
  • @ICanHazUpvotzPleez : Even in such a case it could be a scam: the money might come from a hacked account, or from something illegal (drug money). The illegal money will be traced to Bob, where it disappears (as he took it out as cash and cannot prove whom he gave it) – vsz Nov 11 '17 at 22:18
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If it were a friend of mine, I'd do it without having any real qualms about it.

If it were simply "someone I knew", probably not.

Of course, if I trust them them enough to do that, I'd probably just give them the cash and let them pay me back in a day or two.

(I'm imagining a scenario where I'm out with a few friends, for example bar hopping or at an event where most vendors require cash and we're talking an amount less than say $50. Any more than that, and I almost certainly would not agree).

PGnome
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    I'd add my usual loaning money to friends criteria. I either need to be okay never getting paid back or potentially ruining the friendship it they flake on paying me back and I have to push them to get paid back. – Evan Steinbrenner Nov 10 '17 at 18:06
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    This is not a good answer because it does not address that the OP is facing an obvious scam. – R.. GitHub STOP HELPING ICE Nov 11 '17 at 02:24
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    This is a fairly dangerous accepted answer. Should it be edited to include scam information? Accepted answers show up in Google searches. – Nelson Nov 11 '17 at 15:55
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    @Nelson I don't see the danger. Someone following this advice wouldn't be tricked into giving any money to a scammer unless they were a friend. In that case I would consider the $50 lost as money well spent, as now you would know they aren't really your friend. – Ross Ridge Nov 11 '17 at 20:34
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    @R.. @ Nelson I clearly stated when I would and wouldn’t agree to such an arrangement and only with someone I trust. I personally have been on both sides in the situation I described. Saving $3-$5 in fees when you just need $20 or $40 in cash isn’t an unreasonable request to me. – PGnome Nov 11 '17 at 21:25
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    @RossRidge: What's harmful is that it contributes to the (common) delusion that this sort of situation even might be something legitimate and not a scam. – R.. GitHub STOP HELPING ICE Nov 11 '17 at 21:50
  • @R.. I have literally done this. I have had a friend withdraw $40 from his bank’s ATM for me so I didn’t pay $2 to my bank and $2 to his bank. I simply paid him back a day or two later. If we had Venmo or something like that, I might’ve transferred the money electronically right then and there. It’s not always a scam and not all your friends are trying to screw you (and if they are, you need new friends...) – PGnome Nov 11 '17 at 22:19
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    @pwcnorthrop: This is a very different situation from OP's. (1) the person is your friend, not an evasive "someone OP knows". (2) they're paying you back via some legitimate means rather than "depositing into your checking account" (which likely means either with a check or by asking for your account number). The whole problem with your answer is that it's equating OP's situation with your completely unrelated scenario in a way that lends legitimacy to the former. – R.. GitHub STOP HELPING ICE Nov 11 '17 at 22:23
  • @R.. I'm pointing out where such a request could be legitimate. To your (1), I clearly stipulated in my answer that I wouldn't do it for someone I simply knew, only a friend. To (2), yeah, if the OP is literally handing over their account #, that's a red flag, but there's other mobile banking options that weren't as ubiquitous when I was in this situation (I've since used Venmo, but even Facebook is getting in on that) that just need a few taps to transfer from one account to another. – PGnome Nov 12 '17 at 15:30
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    @pwcnorthrop - I suggest editing the first sentence to say "If it were a friend I'd be willing to loan money to..." You make that point later, but by putting it in the first sentence, you address the "it's a scam" concern. – Bobson Nov 13 '17 at 04:05
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There are at least a couple problems:

  1. Your friend may not manage money well and so may not have enough money in the account. Check bounces. They get charged a fee. You get charged a fee. You have to chase after the friend to get the fee paid. The friend was cheap about the regular fees and doesn't want to pay this much higher fee.

  2. Your "friend" may really be a crook. The check is no good. Perhaps it's written under a false identity such that you are attempting to cash a stolen/forged check. You cash it. They take the money and disappear. You get charged with participating in the crime, go to jail, and now have a criminal record (worst case).

My quick thought is that if you don't know the person well enough to know the home address, you don't know the person well enough to cash checks.

In general, I would view this the same as a loan. When loaning to a friend, you should never loan more than you are willing to lose. Note that an actual loan would be safer. If you loan $50 to a friend, at worst you're out $50. If you deposit a fraudulent check, you did something illegal. You will have to be convincing when you tell your story to the police. If they don't believe you, they could charge you. A couple bad breaks and you could go to jail.

Brythan
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There are lots of reasons why a crook would want you to do this: counterfeit check scam, laundering money, trying to get your account information, getting you used to doing questionable things and then escalating, seeing whether you're the kind of person to go along with bad ideas, etc.

There are not, however, much in the way of good reasons for it. I gather you can withdraw money from your bank without an ATM fee. This I am assuming from the fact that it is being proposed that you withdraw money from your account, and the fact that this is how pretty much all non-predatory banking works. If this person's bank won't let them withdraw money without a fee, something is seriously wrong, and they should get an account at your bank. Do they get charged for using a live teller as well? If not, how is getting money from you easier than getting it from a teller? How much is the fee? If the fee is $2, and you're making $10/hour, that's 12 minutes of wages. Does it take less than 12 minutes to complete this transaction (including the time this other person is spending)? This cartoon comes to mind: https://xkcd.com/951/

Acccumulation
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I'd like to take a moment to point out: I cannot find a bank that charges customers with a checking account fees for withdrawing from an atm owned by that same bank.

It is a cornerstone of most banks now to encourage online and atm banking.

You should definitely research the validity of the claim that you're associate cannot withdraw from their own account through their own bank's atm without fees.

A second scenario I can think of, is that this person uses a bank that does not operate in your region. Then they cannot find an atm owned by their bank. If this is the case, they should simply go to the bank the check is drawn on, and cash it there. So far I only know of Chase bank charging non-Chase customers to cash a check drawn on a Chase account (this is a crap policy that makes me hate that bank).

**disclaimer - I am not familiar with all banks, but a quick Google search of banks that operate in your region should reveal which ones if any charge their customers for use of their atms. you may or may not find the check cashing charge policy without attempting to cash the check.

cornbread
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