It's not a Nigerian money order, but......

August 23, 2010 8:04 PM

I'm trying to sell my car: is this potential buyer trying to scam me by paying with a "credit card check?"

I'm selling my car on craigslist and a VERY interested buyer wants to pay for it using a "check" from his credit card. I know of these checks, because my credit card company frequently sends them to me, but I always just shred them and throw them away. He wants to give me the check, let me cash it, and let the money clear into my account before he will take possession of the car.

It seems like this might be okay, but I'm wondering if he could possibly challenge the charge later and I could somehow be compelled to return the money. Does anyone have experience with this sort of transaction or thoughts about things that could go wrong?

Aside from the method of payment, my read on this guy is generally positive. I'm not really getting a scam feel from him, but it's always hard to know.

posted by otolith to work & money (23 answers total)

He certainly can challenge it if it's real. But it's also quite possibly 100% fake. As in, your bank will cone after you for the money after they've 'cleared' the check into your account.

You want a money order or a cashier's check when dealing with craigslist buyers. Or even better, cash.
posted by bilabial at 8:08 PM on August 23, 2010 [1 favorite]

If he has the money really, and wants to buy really, he can find another way to pay.
posted by Meatbomb at 8:09 PM on August 23, 2010 [2 favorites]

These cheques are like a cash advance against your Credit Card (not a like purchase), so all he has to do is take out a cash advance on his card and pay you cash. For example, since he's not in a rush, he can write himself or a friend the "cheque" and, once it clears, take the cash out of the bank to give to you.

If he refused, it would be a clear sign that he's trying to pull a fast one.
posted by Simon Barclay at 8:12 PM on August 23, 2010 [1 favorite]

Most credit cards explicitly prohibit being used to purchase cars.
posted by b1tr0t at 8:17 PM on August 23, 2010

All he needs to do is write the check to "cash" and put it in his account and bring you cash for the car. He gets to finance the car. You assume zero risk. Everyone wins. Unless he's scamming something.
posted by birdherder at 8:19 PM on August 23, 2010 [3 favorites]

He can just write himself that same check and then pay you with the cash now present in his bank account.
posted by salvia at 8:20 PM on August 23, 2010

Ratto's Law: If during a Craigslist transaction you have a question if something is a scam then it is a scam.

[I just coined Ratto's law right now.]
posted by andoatnp at 8:23 PM on August 23, 2010 [13 favorites]

If I were selling a car on CL I'd insist on cash or that I go with the buyer to his or her bank and stand beside them as they buy a cashier's check.
posted by Kraftmatic Adjustable Cheese at 8:36 PM on August 23, 2010

I bought an $800 car with one of these in college. But yeah, make him clear it first.
posted by mecran01 at 8:44 PM on August 23, 2010

Criminal defense attorney here. There are some awfully authentic looking checks floating around out there; it is amazing what scammers are able to produce.

Do what we criminal defense attorneys do -- only accept cash. If he has the credit line available on the card, he ought to be able to accept cash.
posted by jayder at 8:47 PM on August 23, 2010 [1 favorite]

he ought to be able to accept cash.

Sorry -- I meant "ought to be able to get cash."
posted by jayder at 8:47 PM on August 23, 2010

You sure it's his check? You say you normally shred these, but consider whether this practice is universal.
posted by pwnguin at 9:29 PM on August 23, 2010

If you insist on cash and suggest any of the above suggested methods for him to get you cash and he refuses, then it's a scam.
posted by thorny at 9:39 PM on August 23, 2010 [1 favorite]

Maybe this guy is simply misinformed and he thinks that because he uses the "check" to pay you (or any other person or (non-banking) business) then he is not subject to the fees and high rates of cash advances. He may think it's just regarded by the issuing bank as another vanilla card purchase transaction.

This is almost certainly wrong (I would bet my life savings that it is wrong). However, I've heard people get screwier ideas regarding credit cards. Also, lots of people new to credit cards tend to use these checks since the terms don't sound nearly as bad as you later realize they are after you use one of the checks (or a standard cash advance).

As many others have said above, he can simply write the check to himself, cash it, and hand the cash to you. If he won't do that, he's almost certainly trying to scam you.
posted by InsertNiftyNameHere at 9:53 PM on August 23, 2010

What birdherder said. And now that I look at it, what everyone else said. He can put that check in his bank account and write you a real check, or simply hand you a bunch of cash if his credit is that good. Do not take that check. I worked at a bank, and one of the most fertile grounds for "But I didn't know!" wailing was those credit card checks. A 10-year-old can forge one of those on his Dell PC. (This was 5 years ago - imagine what that kid can do now!) No way should you take it.

If you really have your heart set on selling to this guy, you shouldn't even take a cashier's check from him, really. You should take nothing but cash. If that's not feasible, take the check, but wait until it is cleared (2 weeks) by your bank until you give him the car. I say two weeks because what happens with "cashier's checks" is they're initially approved by your bank , but it takes them longer to figure out that sort of fraud, so 10 days later, you're looking at a gaping hole in your checking account and wondering where it came from. And then it's on you. I'm serious, take cash or he doesn't get the car for a month.

(By the way, for those of you who were curious, the first-place wailing "But I didn't know!" came from fake cashier's checks that, evidently, the teller couldn't tell from a real one.)
posted by deep thought sunstar at 12:44 AM on August 24, 2010

but wait until it is cleared (2 weeks) by your bank until you give him the car.

No. No,no,no no!

I'm not even a US citizen, and I recognize this as bad advice.

[a quick google later]

The bank manager finally admitted to us that a cashiers check could come back and the amount would be deducted from your account in 6 days, 6 weeks, or even 12 months after you deposit it. According to her they have no way of telling!

posted by DreamerFi at 4:55 AM on August 24, 2010

(actually, the reason I know this as a non-US citizen is that I recall the utter amazement I felt when I heard checks of any kind are still in use in the US)
posted by DreamerFi at 4:56 AM on August 24, 2010

Checks can easily be faked. When dealing on Craigslist, insist on cash. If that makes either of you nervous, you can meet at your bank to do the transaction, then deposit it immediately.
posted by Slinga at 5:16 AM on August 24, 2010

Don't take any kind of check, not even a personal check. Only accept cash.
posted by twblalock at 5:59 AM on August 24, 2010

Hahaha, thanks for talking me down on that one guys. I'm obviously too anxious to sell this car for my own good. I e-mailed the guy back last night to insist that we deal in cash and, as many of you suggested above, I told him that it would be just as easy for him to use the check to get cash and then pay me. And poof. Just like that, he's gone. Metafilter just saved my life! I mean, my car.

We should ask Craig to put Ratto's Law as the header to his website. Thanks, everyone.
posted by otolith at 6:08 AM on August 24, 2010

As a former retail banker, I see no reason why he can't deposit the check in his own checking account and then giving you cash.

Depending on the price of the sale, I can understand either the buyer or you wanting to deal with cash (if it was $20,000, for instance, I wouldn't want to have to deal with all of that). However, he should at least be able to give you a cashiers check. A cashiers check is guaranteed by the bank and you can call (but look up the number rather than calling the number on the check) the bank to verify that they did in fact issue that check.

In short, with a sale like this, I would always push for cash but would accept a cashier's check that you've verified as genuine.

You should also feel free to let the customer take delivery of the car but hold onto the title until you're sure everything is on the level.
posted by VTX at 2:52 PM on August 24, 2010

Interesting post-script: the guy got back in touch with me the next day and told me that he now had cash to the buy the car. He really, really genuinely sounded like he wanted to buy it. So, despite my previous suspicions, I agreed to meet this morning. He showed up and it turned out that he was a young guy who really just didn't know how to buy a car and he had assumed that any kind of check would be fine. What seemed like evasive and shady behavior on the phone was really lack of knowledge and naivete. He paid me cash on the spot.

So, an interesting lesson for me on avoiding scams on craigslist, as well as a reminder that sometimes people have better intentions than you are willing to credit them at first.
posted by otolith at 9:14 AM on August 25, 2010

Well, think of it this way - now both of you have learned a valuable lesson about checks and, perhaps, about Ratto's Law.
posted by DreamerFi at 9:37 AM on August 25, 2010