Check cashing fraud

[mh8441]

I am trying to get a definitive answer to a question: I wrote a check to my homeowner's association which was cashed. A few months later I received a statement with a late penalty saying the payment was never received. I looked up my credit union account online and saw the check was cashed. I contacted the homeowner's association and was told to send a copy of the front and back of the check. I did and noticed the front was unaltered with the name of the homeowner's association on the front, but the back was blanked out. I was contacted afterwards by the person at the homeowner's association and was told it was mail fraud (I had mailed the payment at the post office). I contacted the credit union, showing them, the check and they put in an Affidavit of fraud and said they would investigate. I didn't hear back from them. Instead, a couple of months later, I looked at my account and noticed they had reversed the transitional credit they had issued for the check. Again, I contacted the credit union and was told they had contacted the bank that cashed the check (wouldn't give me the name) and when they don't respond after 60 days, the matter is closed, and I am responsible for the payment. There is no investigation. I contacted the check company and NCAU, National Credit Union Administration and was told since the front of the check was unaltered the check was deposited to the payee. The Homeowner's association is telling me, the credit union shouldn't have cashed the check. What is true and what should I or can I do?

[AnnetJ376276]

Your situation involves several key players: your credit union, the homeowner's association, and potentially a third party (if there was actual fraud). It’s complex, but let’s break down the facts and possible actions you can take.

Key Facts:

1. Your Check Was Cashed: The credit union confirms that the check was cashed, but the back of the check was blank, which suggests no clear endorsement or deposit details.
2. Your Homeowner's Association Claims Non-Receipt: Despite the front of the check being unaltered, the homeowner’s association is saying the payment was not received.
3. Credit Union Closed the Investigation: The credit union reversed their provisional credit after failing to get a response from the cashing bank.
4. No Clear Proof of Where the Money Went: The evidence does not definitively indicate that the homeowner’s association received and deposited the funds.

Determining What Is True:

1. Blank Endorsement on the Back: Checks are typically endorsed on the back to indicate deposit into a specific account. A blank back could mean a lack of an endorsement or that someone deposited the check in a way that bypassed a formal endorsement (e.g., electronically or through a mobile app that doesn’t require a manual endorsement).
2. Statement by NCAU: They indicated that if the front is unaltered, the check was deposited into the payee’s account. However, this seems to contradict the homeowner’s association’s claim that the payment was not received. The credit union or the cashing bank needs to clarify where the funds were deposited.
3. Homeowner’s Association Blames the Credit Union: They are stating that the credit union should not have allowed the check to be cashed. This may imply that they suspect an error in the processing or possible misappropriation.

What You Can Do:

1. Request a Clear, Written Explanation from the Credit Union: The credit union owes you an explanation as to why they reversed the provisional credit without concluding their investigation. Get written confirmation of their rationale and demand clarity on the investigation they conducted (or failed to conduct).

2. Demand Proof of the Deposit: Insist that your credit union provide proof of where the check was deposited (into which account). The credit union should be able to obtain this information from the bank that cashed the check. This may involve escalating your complaint within the credit union.

3. Escalate to a Higher Authority within the Credit Union: If your credit union remains uncooperative, request to speak with their fraud investigation team or a higher-level supervisor. Make it clear that the handling of this case does not meet your expectations as a member and that you believe there is unresolved fraud or error.

4. File a Complaint with NCUA: Since the credit union is federally regulated, file a formal complaint with the National Credit Union Administration (NCUA). This could lead to external pressure on the credit union to properly address your issue.

5. Consult Legal Assistance: Depending on the amount of the check and the financial loss you are facing, you might consider consulting an attorney. If you suspect that this could involve fraud beyond simple error, an attorney can help you hold the right parties accountable and potentially recover the funds.

6. Follow Up with the Homeowner’s Association: Inform the homeowner’s association about the steps you’re taking and ask them if there’s anything further they can do to confirm that the payment was not deposited into their account. This communication could also protect you if any further late fees or penalties are imposed.

Key Takeaway:

Your primary objective is to get clear documentation of where the check was deposited. The credit union needs to investigate or clarify why the endorsement on the back was blank and confirm the receiving account. If they can’t prove it went to the homeowner’s association, then they cannot hold you responsible.

If your credit union fails to resolve this, escalation through a formal complaint or legal means may be your best recourse