Chime has sent out an e-mail to account holders stating that effective April 25th the deposit account agreement is being updated. The most interesting this is as follows:
We will no longer accept Money Orders or Cashier’s Checks for deposit through MCD, regardless of issuer. (See subsection 7 for details.)
Hat tip to reader Pete B
Well i cant up load a check or money order to my account so how to delete this account
This is absolutely to stop money laundering/fraud and i am sure they are taking enough losses to warrant this change. I worked as a branch manager for 10 years and when I transitioned into a new role at the bank last summer, the amount of fraud we would see with cashier’s checks and/or MOs was astounding. There were typically 2 common scams:
First most common scheme is a group of criminals would setup a business entity that very nearly matched a legitimate business name. For example, the legit business name is ABC Company Inc and they would setup ABC Company Co. This is typically after they had stolen the legitimate business’ checks from the mail. They would then go deposit the checks in person at the branch hoping the teller would not spot the difference (often they didnt). Even after the Reg CC hold would fall off the new account deposit, the funds would be available because the check was legitimate. The payee would see the check clear and think the intended recipient received it and the legitimate company who had the check stolen typically only made a call to inquire about the non-received check once 60 days passed. The criminals would then come in and get many cashier’s checks cut and then take those checks and begin depositing them at other banks. When the victim company realizes what goes on, they reach out to the payee who contacts their bank who then informs us it was fraudulent and to give them the money back which is typically done.
Second most common scam is that individuals would setup a new account, deposit cash for about 3-4K then get a cashier’s check. They would go outside, make a mobile deposit of that check, and go back to the bank and say they no longer needed it. We would cancel the check and give the money back. Meanwhile the bank that accepted the cashier;s check as a mobile deposit makes funds available next day due to Reg CC and the crook withdrawals the money. The bank that accepted the mobile deposit then gets notified that the check has already cleared (we cleared it when it was cashed same day) and they are out the money.
Unfortunately, a few bad apples ruin the bunch. On an unrelated note, i am happy to answer any retail banking questions anyone may have.
Thx for the tutorial
So I am assuming there are controls in place that prevent this from happening now? Or is it still occurring and you only catch them after the fact?
For the first scheme, controls that I have seen / heard other banks are implementing is increased technology behind the scenes after tellers accept deposit to match name on checks to name on profile also enhanced due diligence with new account openings.
For the second scheme, no not really. Besides increased awareness to front line workers (tellers and bankers) it’s tough to work around because of reg cc rules related to new accounts and official checks. I think we may see more banks just say no thanks to MO/CC deposits for smaller dollar amounts to avoid this and instead push heavily for P2P transfers such as Zelle
Thank you for offering up your insight… Any suggestions for minimizing shutdown risks or even just some thoughts on keeping a low profile with money order deposits?
I wish i could provide a concrete methodology for avoiding shutdowns / low profile but it is 100% going to depend on the risk appetite of the bank. Banks are more regulated now than they ever have been and aside from the risks of monetary fines, the risk of swift and unforgiving lashings on social media if a bank is found to be the facility by which money laundering occurs will force them to always close relationships at the slightest hint some one else would view them as being complacent, whether they think something is actually happening or not. with that being said, its worthwhile to do a cost/benefit analysis of getting shut down at a bank and potentially being unable to do business with them for some time. If you think there could be additional opportunity for churning accounts in the future, don’t deposit any official checks there. I have been a hobbyist of manufactured spending for some time and I have always lived by the “don’t s*** where you eat” mentality.
Why have mercy for a company that is making a lot if money.
Who this hurts are lower income people.
Didn’t even know they did. Could’ve used the diversification. The FT list is rather outdated.
Do we have any DP’s for banks that do accept MO’s via mobile deposit?
The few times I deposited them I took them to the teller because I didn’t want any surprises.
I heard WF did but I tried with the WM ones from the Andigo spend and it didn’t work.
I also recall reading that SBIC does but I hadn’t tried and the account is closed now.
WF mobile deposit doesn’t like the MG ones from WM, the WU ones work fine for me though
i put mine in BBVA.
Flyer talk has a good list. Don’t know how reliable it is.
https://www.flyertalk.com/forum/manufactured-spending/1819582-banks-allow-money-order-deposits-via-smartphone-atm-2017-2019-a-31.html
Schwab and Kearny Bank!
PeoplesBank does. The one at bankatpeoples.com
Darn, didn’t take advantage of this when I could. Chime hasn’t served a purpose other than the referrals.
Wow, kicking people when they are down the most