Consumer Law

How Chase Bank Almost Helped a Teenager Get Scammed

By Jeff Sovern

by Jeff Sovern

A teenager I know responded to a listing for a summer job on Craig's List.  The employer claimed he was opening an art gallery and would pay $400 a week for twelve hours of work running errands and the like.  Because he was out of the country, he was unable to meet her, but emailed her a list of questions.  Upon receiving her answers, he hired her.  She was thrilled.

Shortly afterwards, he overnighted her two money orders totaling $1,700. He instructed her to deposit them and take $200 for half of her first week's salary; she was to wire the remaining $1,500 to an artist that day.  When she mentioned this to me, I became concerned.  What if she wired the money and the money orders later came back dishonored?  And why hadn't he wired the money himself rather than trusting a teenager he had never met? 

So she called her bank--JPMorgan Chase--to find out how long it would take before the money orders cleared.  The answer she received was one day.  That didn't sound right to me, so I got on the phone.  I explained my concern that this was a scam and that I didn't want to know when she could draw on the funds, but rather when the funds would clear so that she was assured that the bank would not charge back her account when the money orders came back dishonored.  Once again, I was told one day.  I was still unconvinced, so we called again.  Again we were told one day.  I haven't looked at check clearing for ages; had things changed so much in the interval?  I tried a third call to Chase, and this time the representative told me what I had expected to hear the first time: while Chase would make the funds available in one business day, it could take much longer than that to determine if the money order was legitimate and that if it were dishonored, Chase would charge back the account.  I instructed the teenager to text the employer that she would not wire the funds until the money orders had cleared, on the theory that if he's legitimate, he will get in touch with her.  So far, she hasn't heard back.  I don't think she will.

The teenager is disappointed at the loss of her seeming summer job and simultaneously relieved at not having lost her savings.  But there's a bigger issue here than just what happened to her.  Most teenagers--and probably most adults--would have stopped at the first phone call.  Many would have wired the money.  Maybe they could later persuade Chase that it should not charge their account back for the dishonored money order because of the information provided by its customer service agent, but more likely they wouldn't be able to.  Chase was in a position to prevent this fraud--and it didn't.

Full post as published by CL&P Blog on July 09, 2010 (boomark / email).