I was in the process of selling my boat. I found a buyer, but the buyer wanted to pay with a check. I told the buyer

Question

That was ok, but he woukd have to wait for his check to clear with my bank before he could take possession of the boat.  We both agreed.   I took the check into my bank branch and deposited the check into my checking acct.   After 5 days the check cleared and was posted to my account.     That same day the buyer for the boat came and took possession of the boat.   Three days after that my bank account was frozen with no explanation.   Come to find iout the check for the boat was fraudulent and my bank had frozen my account with over $3,100.   So now im out my boat and the money.    Can my bank do this?

James L. Arrasmith · Answer

This is an unfortunate situation, and I'm sorry to hear you've experienced this fraud. To answer your question: Yes, banks can generally freeze accounts when fraud is suspected or detected. However, there are some important points to consider: 
 
1. Check clearing process: While a check may appear to have "cleared" and the funds become available in your account, this doesn't necessarily mean the check is valid. Banks are required by law to make funds available within a certain timeframe, but this can be before they've fully verified the check's authenticity. 
 
2. Bank's rights: Banks typically have the right to freeze accounts if they suspect fraudulent activity. This is part of their fraud prevention measures and is usually outlined in the account agreement. 
 
3. Your rights: You should have the right to an explanation from your bank about why your account was frozen. Contact them immediately if you haven't already. 
 
4. Liability: In cases of check fraud, the account holder (you in this case) is often held responsible for the fraudulent amount. This is because you accepted the check and vouched for its validity by depositing it. 
 
5. Reporting the crime: You should file a police report about the fraudulent check and the theft of your boat. This creates an official record of the crime. 
 
6. Legal recourse: You may want to consult with a lawyer who specializes in banking fraud or consumer protection. They can advise you on your specific rights and any potential legal actions you might take. 
 
7. Consumer protection: Contact the Consumer Financial Protection Bureau (CFPB) or your state's attorney general's office. They may be able to provide additional guidance or assistance. 
 
8. Future prevention: For future large transactions, consider using more secure payment methods like wire transfers or cashier's checks verified directly with the issuing bank. 
 
This situation highlights the risks of accepting checks from unknown parties, especially for high-value items. While the bank's actions may be frustrating, they are generally within their rights to protect themselves from fraud. Your focus now should be on trying to recover your losses and pursuing the fraudulent buyer through legal channels.

Q: I was in the process of selling my boat. I found a buyer, but the buyer wanted to pay with a check. I told the buyer