I have had several questions about how this works, so here is my explanation:
They use a cashier’s check or money order that is bogus (either on a real bank but a fake account or a real bank and a real account, but not an account they own. This allows the local bank to verify the bank and account number and it is only when the account holder protests that the problem arises.).
The EM is deposited and the Buyer does an immediate inspection and finds something they don’t like. They request an immediate refund of the EM, so they can buy another home. People assume, since it was a cashier’s check, it was good, but…
When you refund the EM then YOU are liable for the fraudulent cashier’s check or money order that was deposited in your account. In other words, you deposit $10,000 then refund the $10,000 and 2 weeks later then cashier’s check gets returned as a fake. YOU are then responsible for making up the $10,000.
(The banks wrote the law, so they are immune from the liability, just like your are guilty if you receive counterfeit money. If you try to deposit/spend counterfiet money, you are the one that gets arrested.)
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