Someone Explain How This Scam Works

This may not be the only scam method, or it might not be the one you previous read about, but...

Of course the cashier's check is fake. They are relying on banks complying with the Expedited Funds Availability Act, and the account owner's misunderstanding of equating "funds available" with "check cleared". For cashier's checks, in general, banks are required to make the full amount of funds available in 24 hours -- but obviously it may take several times longer than that to clear the check/amount.

If you really wait for the check to clear (say 5-7 days), it will bounce. But unless you sign up for electronic notification, you won't find out until you receive the snail mail notice 1 week later. Meanwhile, if you mistake "funds available" for "check cleared", you will have either sent off the item or will have funneled some part of the overpayment to a 3rd party based on a "last minute" request after you have deposited the check.

That may not be your exact case, but the scam runs along those types of lines...

Sigh, people have brains and some of them use it to think up scams...



Remember, cashier's checks were never intended to be used between two parties that don't know each other. Their purpose is to expedite financial transactions between known parties, not to avoid fraud.