Am I liable for check-cashing, credit card scam charges?

To Her Credit columnist Sally Herigstad
Sally Herigstad is a certified public accountant and the author of "Help! I Can't Pay My Bills: Surviving a Financial Crisis" (St. Martin's Press, 2006). She writes "To Her Credit," a weekly reader Q&A column about issues involving women, credit and debt, for CreditCards.com, and also wrote for MSN Money, Interest.com and Bankrate.com, and has guested on Martha Stewart Radio and other programs.

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Question Dear To Her Credit,
This guy convinced me that he could make me money and that it was legal and that all he needed was my credit card. So I gave him my credit card for the day, and I went to work.

The next day he deposited a check in my checking account and asked me to withdraw the money for him. I waited until the check cleared, and then I gave him the money. After that, my account balance suddenly had a negative $1,400 balance.

I don’t know what he did to my credit card for the whole day, but he told me it was legal and that it would be fine, and now he’s not responding to my texts and my mom wants to file a police report.

If he was doing something illegal, would I go to jail with him? Because he told me it was legal and made it seem like it was his checks he was using. I didn’t know it was a bad check until it was too late. OMG, please help, I need to know. And do I still have to pay that money back? – Leanne

Answer

Dear Leanne,
By now you know this guy was a complete con man, and this was a scam from the beginning. Most people in this situation would feel angry, embarrassed and scared.

You have a right to feel angry, and you may be angry for a long time. Anger focused in the right direction isn’t all bad. Stay angry long enough to report this guy, at least. Even by writing to us, you are helping to warn other people about what can happen, so it doesn’t happen to them.

You have no reason to be embarrassed, however. An amazing number of smart people, young and not-so-young, fall for similar scams. Honest people may be particularly susceptible, because they assume other people are honest, too.

As for feeling scared, you have little to fear from the law just because you were scammed. I went to the bank once with someone who was in almost the exact same check-cashing scam, and the bank representative told us that the first time this happens, you’re a victim. The second or more times you participate in the scam, you are actually a party to it.

This seems like a double scam, in that the con man borrowed your credit card for a day, plus he had you cash a check for him. I’m very concerned about what he did with your card. Have you checked your credit card balance online and looked for charges?

It’s possible he was sneakier than that – he could have written down the numbers or taken a picture of your card, planning to use it later when you let down your guard. Either way, call the number on the back of your card immediately and tell them what happened. They will generally cancel your card and send you a new card with different numbers.

If the scammer has made purchases on your card, you may be responsible for them. You are protected from fraudulent charges when someone steals your credit card. If you hand someone your card voluntarily, that’s another story. The only way to know is to call the card issuer to see what the issuer says.

I’m sorry to say that the money you gave him in exchange for the phony checks is gone, outside of the slim chance that he is caught and your money retrieved or the bank gives you a one-time pass. Even if you had waited for the check to “clear,” you could still have lost the money when it turned out it was bad. When the funds appear in your account, it doesn’t guarantee the check is good.

According to the Federal Trade Commission, it can take as long as six weeks for bad or phony checks to be uncovered. Friends – especially acquaintances or internet friends – shouldn’t ask friends to cash checks. If they have a checking account, they must have a bank. That’s where they should go to cash checks.

Your mom is right – you should file a police report. It may not do any good, or it may help law enforcement put together enough puzzle pieces to put this guy out of business. Either way, you’ll know you did your part.

From now on, keep your finances to yourself. Don’t believe someone who says he can help you make easy money. Don’t give out personal financial information, don’t cash checks, and never, ever lend out your debit or credit cards.

On the other hand, don’t dwell on how stupid getting taken by a con man made you feel. Instead, consider this episode to be a hard lesson learned, and move on.

See related: It’s not fraud if you lend your card out, Zero-liability charges: How they work, what to do when they don’t

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Updated: 11-22-2017