Racial profiling at the bank?

[siesta]

Recently I had some house work done, it was a few thousand and me and the contractor agreed on me giving him half up front and half after completion. The contractor is a legal, mexican immigrant.

I wrote him a check for half, and to make sure i spelled his name correctly he gave me his debit card with his picture on it, which happened to be the same bank I was writing a check from.

Later that night I receieved a call from him saying the bank would not cash the check because the signature did not match, and that he needed the money for supplies to begin work the next day. I told him i didnt understand how that could be since Ive had the same signature for decades and have never, ever had an issue like is. Nonetheless, i told him to meet me back at my house and Id give him cash.

After the job completion, I wrote him another check for the remainder, and he joked with me saying "will they let me cash it this time" and I laughed and said I made sure to write a perfect signature! Well about an hour later I get a call from a lady at the bank, saying they had someone trying to cash a check and were concerned because the signature did not match. I told her it matches exactly and that she was mistaken. She assured me this was for my protection and proceeded to verify some personal info. After that everything went through.

Altough I am grateful for fraud check, in my heart of hearts I know that this was discrimination simply because he is a mexican. Ive never encountered something like this, and not sure what to so, if anything, since Im torn.

 

[DeniseM]

Maybe, but my guess is that with checks above a certain dollar amount, they may automatically double-check everything. Many banks will hold a check above a certain amount for 3 days as well.

 

[Ridewithme38]

Maybe, but my guess is that with checks above a certain dollar amount, they may automatically double-check everything. Many banks will hold a check above a certain amount for 3 days as well.

I agree with denise that it MAYBE racial discrimination and that some banks do double check higher amount checks...I'd also like to add, Signatures change ALOT over 20years and it may not have match

 

[easyrider]

Most legitimate contractors deposit payments into their business accounts and pay bill with these funds.
A legitimate contractor who requires cash may be paying employees under the table.
Most banks will not cash a check that is wrote out to a business. So, your check was either to cash or to the recipient by name. This throws up a red flag as it is not a normal business pratice.

 

[Mel]

That's simply not true. Banks will cash checks made out to a business if the business owner is the one who presents the check. Since this contractor has his account at the very same bank, it seems unusual.

Banks do hold funds for a period of time, but that is regulated, and usually to ensure the chack clears at the other end. If it was being cashed at the very same bank it was drawn from, that shouldn't be an issue. I control 2 business checking accounts, and have never had trouble cashing checks as long as they were either from the same bank, or if I had enough of a balance in my account to cover them if they bounced.

The fact that the teller called suggests that they suspected fraud. The question is why they suspected fraud.

 

[pjrose]

. . . Banks will cash checks made out to a business if the business owner is the one who presents the check. Since this contractor has his account at the very same bank, it seems unusual.
. . .

The fact that the teller called suggests that they suspected fraud. The question is why they suspected fraud.

And him being a Mexican workman may well have been why they suspected fraud. Too bad that kind of stuff happens

If it was to the recipient by name and he was cashing a large amount, it could have been a red flag....but I suspect his name and skin tone were part of the issue.

Perhaps the bank should develop a more subtle way of double-checking when they are unsure, rather than that BS excuse....they could quietly go in another room and simply telephone you to double-check, without lying or causing embarrassment.

It sounds like he had a good attitude despite the possible discrimination, laughing about the second check

 

[dioxide45]

My wife had trouble cashing checks made payable to her DBA name. The bank refused to do it, the check had to be deposited to a business account. This is to prevent people from cashing the checks and hiding the income for tax purposes. If it is deposited, there is a trail that can be used for audit.

 

[robcrusoe]

I agree with Mel and not DeniseM
there's no hold when you're at the bank where the account is, they know whether the money is there
different if you're depositing some other bank's check written to you

 

[easyrider]

That's simply not true. Banks will cash checks made out to a business if the business owner is the one who presents the check. Since this contractor has his account at the very same bank, it seems unusual.

Banks do hold funds for a period of time, but that is regulated, and usually to ensure the chack clears at the other end. If it was being cashed at the very same bank it was drawn from, that shouldn't be an issue. I control 2 business checking accounts, and have never had trouble cashing checks as long as they were either from the same bank, or if I had enough of a balance in my account to cover them if they bounced.

The fact that the teller called suggests that they suspected fraud. The question is why they suspected fraud.

Since your an accountant, what would be a normal business practice, depositing a large check or cashing a large check ?

When a check to a business is cashed instead of deposited there isn't a good paper trail and the income could go unreported.

I think your right that the bank suspected fraud. The reason for checking is more likely that the banks have been getting burned by bad checks, especially this time of year. imo

It is illegal for the bank to be prejudiced or discriminatory so I doubt that is the reason.

 

[dioxide45]

I agree with Mel and not DeniseM
there's no hold when you're at the bank where the account is, they know whether the money is there
different if you're depositing some other bank's check written to you

Many banks still hold the funds until the next business day because the teller taking the check isn't checking the availability of funds on the spot, that happens during the check clearing process every night.

 

[Mr. Vker]

Similar experience...entering Best Buy one day I noticed the alarm go off as three young black men were leaving. Appeared late teens. Their bags were searched completely.

As my wife and I left, the alarm sounded for us. We were just waived through--by the same security man. I am pretty conservative, but that aggravated me. I asked the guy: "Would you have waived me through if I was black?" I just walked off. I emailed Best Buy about it. Nothing but a canned response.

 

[Talent312]

According to an accountant-friend, had the check been made payable to a business, the bank should have refused to cash it and only accepted it for deposit subject to a hold, as such checks are notoriously susceptible to fraud.

However, when payable to an individual and presented to the bank on which it was drawn by another customer, there's no reason not to cash the check... unless there is a genuine question as to the signature.

One must wonder if the check had been presented by a white anglo-saxon if they would have been as vigilant.

 

[Passepartout]

Smells like profiling to me. I don't like it, and in the case of the OP, where the contractor has an account at the same bank, there's no excuse. But like it or not, that's the way it is in the 'Land of the Free' today.

Lets hope it can change.

Jim

 

[pjrose]

Smells like profiling to me. I don't like it, and in the case of the OP, where the contractor has an account at the same bank, there's no excuse. But like it or not, that's the way it is in the 'Land of the Free' today.

Lets hope it can change.

Jim

Once again, I'm with Jim.

 

[easyrider]

Unless it was the same person, both times the guy went into the bank, that required the signature, I would think it is more of the banks policy than discrimination.
As far as profiling goes, this is the world we live in today.

It could also be blatant driscrimination, who knows ? Siesta could contact the bank to get an explaination.

 

[siesta]

some clarifications

check was to recipient by name. my signature has not changed significantly in any way. I consistently write checks of a higher value than what was written to this gentleman, and there were ample funds to cover the check. Like I said, I have never encountered an issue like this before.

I am extremely confident that I can write the same check to my white neighbor, for the same amount, with the same signature, and he wouldnt have any issue whatsoever.

 

[bjones9942]

According to an accountant-friend, had the check been made payable to a business, the bank should have refused to cash it and only accepted it for deposit subject to a hold, as such checks are notoriously susceptible to fraud.

If the check is not endorsed with a 'For Deposit Only' then asking for cash would be reasonable and should make absolutely no difference if the check is made out to a business or an individual (as long as the person requesting the cash is a signatory on the account). While there may be other issues involved (account frequently overdrawn, not enough in the account to cover the check), they don't appear to apply in this case since the teller said the signatures didn't match. I'd go with profiling. BTW, I'm also an accountant. The specialists in this area are bankers. Accountants know just as much, or as little, as everyone else (I guess that qualifies my response as well!).

 

[dioxide45]

If the check is not endorsed with a 'For Deposit Only' then asking for cash would be reasonable and should make absolutely no difference if the check is made out to a business or an individual (as long as the person requesting the cash is a signatory on the account).

What should really happen when a check is made payable to a business is that the check is deposited and then a separate withdrawal transaction is done. Cashing the check directly doesn't leave a trail.

In the case of the OP the check was made out to the individual who also has an account at the bank. The check was drawn at the same bank. The customer had an existing banking relationship. What we don't know is when the contractor went in to the bank, did he show them that he had an existing account or did he just try to cash the check because it was drawn on that bank? What kind of history existed on that existing account? Not looking for real answers, but we don't know all the important points behind this that could cause the bank to raise flags.

 

[robcrusoe]

According to an accountant-friend, had the check been made payable to a business, the bank should have refused to cash it and only accepted it for deposit subject to a hold, as such checks are notoriously susceptible to fraud.

However, when payable to an individual and presented to the bank on which it was drawn by another customer, there's no reason not to cash the check... unless there is a genuine question as to the signature.

One must wonder if the check had been presented by a white anglo-saxon if they would have been as vigilant.

.....exactly!

 

[Rumpled]

Nah, banks don't racial profile. Why else would BofA pay $335 million while admitting no wrongdoing?

 

[Pat H]

Checks made payable to a company cannot be cashed unless the company is a sole proprietor and the person cashing the check is the owner. Just because someone is a signer on the account doesn't give them a right to cash a check payable to the company. Racial profiling? Maybe yes, maybe no. Depends on what is going on in the area. Maybe there is a ring of Mexicans cashing stolen/forged checks in the area. Also don't know what really transpired when payee was asked for ID. When I taught teller training, we used to emphasize that you can't go by looks. The ones who get away with the most are the ones you least suspect.

True story - Serial bank robber with an unusual mo. African American suspect who carried an accordion file in which he had the tellers put the money. Guy with a similar description and the accordion file comes into a branch and police are called. Wasn't the bank robber but a bank auditor from another area. Should they have waited to be robbed first? I don't think so.