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I sold bitcoins worth of $9500 to a person who told me that he made cheque deposit to my account by using SMART ATM of Westpac bank. When I logged into my Westpac, it was showing that $9500 was pending. Normally Westpac shows every other deposits as pending at first and then eventually clears fund within 2/3 business days.

So I released the bitcoins to that guy. Later, Bank manager called me and said they could not find the cheque anywhere in deposit machine and asked me to provide more information. I asked them if cheque was not found or validated, why would you show it in my transaction history. I have a screenshot of that as well.

Later, I understood it was probably a cheque fraud. Was there any faults by Bank? I think the scammer actually fooled the bank machine? Can I claim my money back from Westpac or file a case against them?

  • Law SE is not for legal advice: Talk to the bank again and find a lawyer if they won't help. – BlueDogRanch Dec 5 '16 at 17:24
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    The rule of thumb in the world of payment systems is that losses ultimately fall on the person who has the closest dealings with the thief. But, the full analysis is much more technical than that. – ohwilleke Dec 5 '16 at 19:08
  • I'm sorry for your loss. After looking at the "Cardless Deposit" video at westpac.com.au/personal-banking/services/atms/atm-features I think your case is fairly weak - you might be able to claim through the ACCC that the service was not of merchantable quality and you suffered loss as a result, however, from what you say, the funds did not show up as cleared funds so by releasing the bitcoin early the risk would fairly be yours. I don't see how this would be significantly different [from bank liability POV] from depositing a bad cheque into your account over the counter. – davidgo Dec 6 '16 at 5:13
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You have been scammed - report this to the police. There is little to no chance this person will ever be found or that if they are that you will get your bitcoins back from them. On the plus side, for the bargain price of $9,500 you have learned never to trust a cheque until it is cleared.

You do, however, have avenues with your bank. You can ask Westpac what redress they will make. You can make a formal complaint to their complaints department. You can then go to the Financial Ombudsman Service. Legally, I don't think you have a leg to stand on as your releasing goods on the basis of a pending cheque is your own idiocy, however, the bank may make some redress as a commercial decision to a loyal customer.

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If I send you a check that is stolen or well forged, then your bank will accept it, put the money into your account, and it can take ages (say ten weeks) until they find out, and then they take the money back. If you spent the money, then you owe the bank that money. For example, you might be given a $10,000 check stolen from a person who only notices months later that the money disappeared from their savings account. Of course they get their money back, and you are holding the bag.

This is the basis for many, many scams. You can absolutely not rely on payment by check, even if your bank says the money is there in your account, unless you know the person, know where they live, and know how to get hold of them if the check bounces.

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