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We had a local scam that hit the news here ... a guy was selling a high end car so they met at the buyers bank ...the buyer gave the seller a cashiers check at the bank and the seller signed over the car .....
The buyer stopped the cashiers check right after and the payment was stopped ....
After not getting a response from the buyer as to the stopped payment the seller went to the police ...the police said it was not a criminal matter since he legally signed the car over ,it was a civil matter ..... so his only recourse was to track this guy down and try to get him in to court .... we never saw a follow up in the news but it shows a cashiers check is not like cash at all
Why do so many people not have a checking account? If it's just because they're poor - does it cost that much to have a checking account?
I'm asking this because somebody said people cash their paychecks and then buy money orders to pay their bills.
There is a huge economic (not necessarily socioeconomic) underclass that either distrusts banks, thinks they don't get any value from them, or have screwed up their credit and finances so badly that no one will give them an account. So they pay a fee to cash their paycheck, put it in their pocket, and stand in line to buy MOs to pay bills and such... often spending 10 to infinite times what your average Jane or Joe with a free checking account pays.
Between check cashing fees, money order and other fees (like your $15 for a service given free by most banks) and payday loan places, it's a tier that shoots themselves in the foot every month because no one has convinced them not to. Yes, a few are truly trapped there, but most are just... stupid about personal finances and convinced that a checking account makes them some kind of huge target or victim. The sour joke is that carrying your cash in your pocket and paying retail for each service is the real victimization.
Why do so many people not have a checking account? If it's just because they're poor - does it cost that much to have a checking account?
I'm asking this because somebody said people cash their paychecks and then buy money orders to pay their bills.
Some people cannot get checking/bank accounts, others simply will not for various reasons.
If you watched the Sopranos you'll recall Paulie Walnut's aunt tells him about a friend who keeps all her money under a mattress, this includes a large sum from selling her house. That bit of news was like catnip to Paulie who breaks in, kills the woman and steals all that cash.
There are still many people (seniors, elderly and even younger) who don't trust banks. Many are old enough to remember various bank runs or whatever that happened before or during Great Depression. And or remember problems with banks in the old country. So they keep their money hidden around the house or whatever where it is "safe".
Obtaining a bank account isn't easy. By law all federally chartered banks (and most state regulated as well), must "know their customer" Indeed stricter laws were put into place after 9/11/01.
You need sufficient ID that will satisfy a bank as to who you are, your residence, that you a US citizen or legal resident, and other information before any bank will even consider opening an account.
All banks do a "credit check" on those seeking to open accounts usually using a company known as "Chexsystems". If persons in past have handled their bank accounts badly (accounts closed for suspicious activity, constantly over drawn, over drawn accounts closed, etc...) and their name lands in any of those databases no bank will allow them to open an account. It takes about seven to ten years (not sure) before adverse information in Chexsystems drops off. So until then unless someone can find a bank that doesn't care, they won't be opening an account.
Bank accounts aren't "free" as some would like to believe.
Most checking, savings or whatever personal accounts come with various minimum balance requirements to avoid monthly fees. There may also be fees for atm use (such as out of network) and so forth.
Then you have those who don't know how to handle their business and are constantly hit with over draft fees. We're not talking once every now and then but on near monthly basis something happens that causes their account to go into negative status.
Many poor or whatever persons treat a bank account like a check cashing service. Their paycheck is deposited on Friday, and by a week (or less) later much of it is already gone. Many can barely (or not at all) maintain any sort of minimum balance say at or over $100. So they are constantly paying monthly maintenance fees.
Finally you have those who are running game and don't want LE, IRS, or anyone else to know their finances. Everything from drug dealers or prostitutes (and other illegal activity) to people working off the books but claiming various benefits, and or not paying income taxes. People with judgments/liens, owe child support, anyone who needs or wants to hide income.
Some people cannot get checking/bank accounts, others simply will not for various reasons.
If you watched the Sopranos you'll recall Paulie Walnut's aunt tells him about a friend who keeps all her money under a mattress, this includes a large sum from selling her house. That bit of news was like catnip to Paulie who breaks in, kills the woman and steals all that cash.
There are still many people (seniors, elderly and even younger) who don't trust banks. Many are old enough to remember various bank runs or whatever that happened before or during Great Depression. And or remember problems with banks in the old country. So they keep their money hidden around the house or whatever where it is "safe".
Obtaining a bank account isn't easy. By law all federally chartered banks (and most state regulated as well), must "know their customer" Indeed stricter laws were put into place after 9/11/01.
You need sufficient ID that will satisfy a bank as to who you are, your residence, that you a US citizen or legal resident, and other information before any bank will even consider opening an account.
All banks do a "credit check" on those seeking to open accounts usually using a company known as "Chexsystems". If persons in past have handled their bank accounts badly (accounts closed for suspicious activity, constantly over drawn, over drawn accounts closed, etc...) and their name lands in any of those databases no bank will allow them to open an account. It takes about seven to ten years (not sure) before adverse information in Chexsystems drops off. So until then unless someone can find a bank that doesn't care, they won't be opening an account.
Bank accounts aren't "free" as some would like to believe.
Most checking, savings or whatever personal accounts come with various minimum balance requirements to avoid monthly fees. There may also be fees for atm use (such as out of network) and so forth.
Then you have those who don't know how to handle their business and are constantly hit with over draft fees. We're not talking once every now and then but on near monthly basis something happens that causes their account to go into negative status.
Many poor or whatever persons treat a bank account like a check cashing service. Their paycheck is deposited on Friday, and by a week (or less) later much of it is already gone. Many can barely (or not at all) maintain any sort of minimum balance say at or over $100. So they are constantly paying monthly maintenance fees.
Finally you have those who are running game and don't want LE, IRS, or anyone else to know their finances. Everything from drug dealers or prostitutes (and other illegal activity) to people working off the books but claiming various benefits, and or not paying income taxes. People with judgments/liens, owe child support, anyone who needs or wants to hide income.
My grandfather was like this. He had a shoe store where he took in a lot of cash. He seemed to have gotten over it when he had jumbo $100k CD's paying 16% interest. There were rumors upon his death that he had buried cash in his back yard but we never found any. At least that's what my sister told me.
Some people cannot get checking/bank accounts, others simply will not for various reasons.
But for every person who is genuinely blocked from having a checking account (through erratic living circumstances or very poor credit rating), there are ten who are simply stuffed with myths and misinformation and a history of making poor choices with providers.
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Obtaining a bank account isn't easy. By law all federally chartered banks (and most state regulated as well), must "know their customer" Indeed stricter laws were put into place after 9/11/01.
This greatly overstates the problem. If you have crappy ID and no fixed address, yes, you will have problems. But a great many people with both ID and residence avoid banks for nearly superstitious reasons... and keep paying a huge percentage of their income for substitutes.
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Bank accounts aren't "free" as some would like to believe.
Flat-out wrong. Many banks and most CUs offer absolutely free accounts with very few balance or activity requirements.
This is where people who are clueless about personal finance make the mistake(s) that drives them away from banking: they go to the wrong bank. They go to the corner big-name bank that really does't want small accounts and penalizes any customer who isn't above a certain tier; the dummy opens an account anyway and pays exorbitant monthly and transaction fees... and gawdelpum if they bounce a check.
Where they should go is to the tier of banks and institutions that serve small customers - and they WILL get an account free of almost all fees, other than reject charges and modest charges for things like cashier's checks. There are many.
(There are basically three tiers of retail bank in the US: the ones that work with the smallest customers and make their money in volume - and high screwup fees; the 'spectable middle tier who want only 'spectable customers and keep the riff-raff out with monthly charges and high service fees; and the snotty level of banks that will open an account for anyone - they pretty much have to - but don't really want any but a rather upscale and well-off clientele. Both Red Bank and Santander would be delighted to have me as a client - and it would be free - but I have such a low opinion of their customer practices I won't go near them.)
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Most checking, savings or whatever personal accounts come with various minimum balance requirements to avoid monthly fees. There may also be fees for atm use (such as out of network) and so forth.
Some, not "most." I am, these days, a very modest retail bank customer - my big money is elsewhere - and I have not paid a fee to a bank in ten years. I have a business account that often has less than $100 in it... no fees. I get counter checks for the asking and cashier's checks on request... no fees.
It's simply not true that free accounts are not available to anyone with modest resources and needs.
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Many poor or whatever persons treat a bank account like a check cashing service. Their paycheck is deposited on Friday, and by a week (or less) later much of it is already gone. Many can barely (or not at all) maintain any sort of minimum balance say at or over $100. So they are constantly paying monthly maintenance fees.
Because they're at the wrong bank.
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Finally you have those who are running game and don't want LE, IRS, or anyone else to know their finances. Everything from drug dealers or prostitutes (and other illegal activity) to people working off the books but claiming various benefits, and or not paying income taxes. People with judgments/liens, owe child support, anyone who needs or wants to hide income.
And those who think they are such off-the-grid outlaws that they have to hide out (and, charitably put, aren't). In any case, I'm not going to lose sleep because small-time grifters and dealers - and wannabe one-percenters - have to stuff their money in their sock.
Wire transfer is far superior to a cashiers check these days. Too easy to fake a cashiers check with todays technology.
Also a cashiers check is a bit of a funny animal, It is actually a liability on the bank. If the bank were to fold while the check is outstanding in would get caught up in the bankruptcy. It not guaranteed like a deposit is. Both the drawer and the payee would be out the money until it is settled.
My grandfather was like this. He had a shoe store where he took in a lot of cash. He seemed to have gotten over it when he had jumbo $100k CD's paying 16% interest. There were rumors upon his death that he had buried cash in his back yard but we never found any. At least that's what my sister told me.
Did you check her handbag?
Did you notice lots of freshly dug holes in your grandfather's back yard? I'm just saying.
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