Is legal sending dollars to someone in Mexico, and sending them back for profit?
It is certainly legal to transfer money between people, no matter how often, as long as the money is not originally from illegal sources. If you are gaining in the process, you need to pay taxes on your (net) gain, as on any income; but as always, taxed income is still income. Consider the accumulating transaction cost, the inherent risk (of your friend keeping the money), and the risk of the exchange rate going the other way; but otherwise it is a simple arbitrage business. There are thousands of people who do that all year long at stock exchanges and money markets; you might be able to do it more efficient there, and you don't need a 'friend' on the other side for that.
"There are three possibilities.  This is a scam, as others have pointed out, it works by you sending money, then them stopping the original transfer, meaning you sent them your money and not theirs. They make money cause a stop payment only costs $50 (or around there) but you sent $1,000. So they profit $950. You lose $1,000 and maybe some processing fees. This is money hiding, or money laundering. They send you $1,000 in drug money, you send them $1,000 in ""clean"" money. You don't lose any money. But they gain a clear paper trail. With large sums of money (in the U.S. anything over $5k) you have to prove a paper trail. They just did. You gifted it to them. On your end, it looks like you just profited from illegal activity, which in the worst case ends in confiscation of ALL your assets and jail time. It might not come to that, but it could.  This was an honest mistake, by an idiot. It is possible to wire a complete stranger money. If you make a mistake on the wire transfer forms, and the account number exists, it will go through.  Now what makes the sender an idiot is not the mistake. We all do that. It's the fact that banks have a built in system for handling these mistakes. Simply put, you can make a stop payment. It's around $50 (varies by bank and sometimes amount transferred), it's easy to do, and almost automatic. If you tell a bank rep that you made a mistake they will likely have you fill out a paper, and in many cases will ""just take care of it"". If ""the idiot"" didn't want to tell the bank of the mistake, or didn't ask for help, or didn't want to pay the fee. Then maybe they would contact the receiving party. But that's pretty dumb. Resolution The resolution in all cases is the same. Visit your local branch, or send in writing, an explanation: ""I found $1,000 in my bank account that I didn't put there, and got this email (see attached print out). Please advise."" They will ""freeze"" the $1,000 (or maybe the account but I have never seen that) while they investigate.  You won't be able to spend it, they might even remove it pending the investigation. They will contact the bank that issued the transfer and attempt to sort things out. You shouldn't be charged anything. You also won't get to keep the money. Eventually the bank will send you a letter stating what happened with the investigation.  And the money will vanish from your account.  Specific questions I wanted to state the information above even though it doesn't address your concerns directly because it is important. To address your specific questions: Question 1) Surely bank account numbers have a checksum, which make it relatively difficult for a typo to result in a payment going to the wrong person? Nope, that's up to each bank. Usually the account numbers are not sequential, but there is no ""checksum"" either. Just like credit cards, there are rules, but once you know those rules you can generate fake ones all day long. In some cases, account numbers 5487-8954-7854 and 5487-8945-7854 are both valid. It happens.  Question 2) What are likely sources of them being able to find my phone number to call me? Phone numbers are not private. Not even close. Phone books, Google, Websites, etc etc. if you think your phone number is in any way a secret then your totally misinformed.  Account numbers are not a secret either. Especially bank account numbers. You could totally just call a bank, and say ""What is the name on account 12345?"" and they would tell you. Checks have your name and account number on them, as do MANY documents from a bank. So anything from asking the bank, to finding a copy of a check or document in the trash are valid ways to make the link.  Question 3) How were they expecting to benefit? See options 1 and 2 above. If is is really option 3, then your bank should have directed the money back. But if the person was so messed up as you say, the account may have been closed and ""written off"". When that happens a lot of weird stuff can happen. Essentially the bank is ""taking a loss"" of money and doesn't want the money back even if the account was closed with a negative balance. Usually though contract with debt collectors, they may have already been ""paid"" for that debt, and are not allowed to take the money back. These things happen, but it seems like a pretty odd set of things that need to line up for #3 to be valid. About your Length of time Usually these things resolve in less then 90 days. Usually far less. At the 90 day mark, it gets really hard to reverse a transaction. It's possible that it was a scam and so many people fell for it that the scammers just let you keep the money instead of ""highlighting"" their scam.  The fact that your using a ""net bank"" means that your can't go in person, but you should get details in writing. State the transaction number (it should be in your account records) and ask them for a ""letter of resolution"" or some form of official document stating the outcome of their investigation. I suspect that no one every really investigated the issue and the rep you spoke to never did anything then ask you to ask them to fill out a stop payment. You need a record of trying to sort this out. You don't want to up for some legal battle 10 years from now because someone found out that the money was part of a pool that was used to fund some terrorist group or some such. So get a paper trail, then go with what the bank says." "He wants to send me money, as a gift. Do you know this friend? It could easily be a scam. What I don't know is that how much money can he send and what are the taxes that would be applicable in this case? There is no limit; you have to pay taxes as per your tax brackets. This will be added as ""income from other sources"". I'll probably be using that money to invest in stock market. If the idea is you will make profits from stock market and pay this back, you need to follow the Foreign Exchange Management Act. There are restrictions on transfer of funds outside of India." The typical scam is that they overpay you - 'accidentially', or for some obscure reason they claim, and they ask you to wire the extra money either back or to someone else. Because you wire it, that money is gone for sure. Then they undo the original transaction (or it turns out it was fake anyway), and you end up with a loss. Maybe he claims that he wants to buy some more stuff, and the fees are high, so he sends you all the payments in one amount, and you pay the other sellers from it, something like that. There are honest nigerians though, actually most of them. Either way, the real problem is that the original payment is fake. Whichever way it comes to you, you need to make sure that it cannot be reversed or declared invalid after you think you have it. Wire transfer is the only way I know that is not reversible. Bank transfers are reversible; don't think you have it just because it arrives in your bank account. Talk to your bank about what all can happen. If you make the deal, when you send the bike, think about insuring it (and make him pay for that too). That way, you are out of any loss risk. So true. My bf works at the shipyard and can go through some damn steel toed shoes with all those stairs. He always has a pair of Timberlands and a pair of cheap shoes. Every 6 months his Timbs break, but they had (I'm not sure if they still do I heard they were thinking of stopping) a lifetime warranty. He would send his shoes back when they broke and use the cheap ones in the meantime. Then Timberland would send his new shoes back within 4 weeks and he could keep going. He's gotten at least 6 free boot replacements from them at the initial cost of about $100. "Someone asked this over in /r/darknetmarkets , they were asking how to profit off NV specifically, but here's what I wrote there, I'd be curious what you guys think:  &gt; Go back in time about 6 mo, case the medical scene for movers and shakers, write some proposals to help them expand. Traditional banks won't touch financing these guys with a 10ft stick right now, the Fed has told them straight up they will lose FDIC membership if they touch ""drug money"" (cough cough tobacco and alcohol don't count? cough cough). If you don't have a time machine, either come up with a way to be a bank to these guys without going to a Fed lockup, or go finance expansion in the next state which legalizes. It's gonna be a while until these guys get integrated with the regular money system to the point they have stocks and such. Or maybe the Fed freezing them out as they make a fortune will just push forward crypto currency and hasten the collapse of the current money oligarchy, who knows.  There was also some comments about shipping from NV to home states, which is probably a bad idea for many reasons. I did however feel I can offer some insight on a legal president for this kind of behavior,  but exactly how legal reshipping to avoid direct shipping of a purchase to a state is (I mean, once it's your proper legal property and you're just shipping it to yourself that does seem legal, right?) or if it would get the same blind eye when done with pot are huge unknowns:  &gt;I'm sure the Feds will not see a problem with sending drugs to yourself across state lines! Actually funny enough I live in the wine region of CA and there is a whole business here of wine ""storage and shipping"" places. It's up to the states to decide how or if they allow alcohol to be shipped into their state from others, and a bunch of state have very complex rules or just don't allow it. So if you come out here for tourism, drink some wine at a winery, like it, and ask if you can have some shipped home, the answer is about 50/50 to be 'no'. And if you're a average income pleb, that's your answer. If you're some rich dude however, you can say ""ah gotcha, pesky laws... well here's the address of my storage and shipping place, send the 2 cases there then"", nobody bats an eye, and off the cases go. Guy goes home, calls up the shipping place, and says ""hey pull those cases, my personal property, and ship them to me"" and, somehow, magically, this is now legal. I have no idea who's taking on the liability here, if the shipping place has them sign off ""we will ship wherever you ask, it's not our job to verify the legality of your request"" then I guess it's on the consumer, but if you have an entire business built around circumventing state law it would seem to me that this should be a legal problem. But, wine is a high-end commodity, rich people make their own rules, and if CA turns a blind eye to this practice they get to collect the sales tax as it's sold in CA and shipped to a location in CA, whereas fighting it would hurt their tourism and also send the tax income to the states being shipped to. C.R.E.A.M. baby!  Re-reading this now I'm not even sure if there IS a liability here. They bought the property in CA, paid tax in CA, and had it sent to a mailing address in CA. What they do after that with their personal property is not the states business, right? I'd imagine this would be drastically different if shipping for resale. Similarly, I think this all only works if you complete the transaction while physically in the state. So at most this might turn on some weed tourism.  The big difference in all of this is that the Fed is fine with alcohol, but not weed, so, while I suspect someone will form such a weed storage and shipping place at some point, I don't really want to be first in line to see how this flys and if it lands you in trouble with the Fed." "FYI, USA is not the only country in the world. If you try to stop people from making money, they will go do it elsewhere. Other countries are more than willing and competent, to accept these HFT folk.  Even if all countries stop HFT. There will be encrypted black markets for this on the internets. Google ""dark pools"". Regulators are light years behind the ingenuity shown by Wall Street to find inefficiencies in the market.  Computers and quantitative finance are here to stay. You cannot ask people to trade using emotions like during the Great Depression Era." Not by you. Your bank might have to fill some reports for the IRS, but for the customer, nothing needs to be done. As long as the money is not income from illegal activity you don't need to worry about it. Well, that would be a breach of contract. I'm not sure whether it would trump the legal tender law or not (IANAL).  &gt;If people voluntarily choose to, what's the problem?  Nothing. Nothing at all is the problem, which is why i'm not sure why you aren't doing so right now. It's perfectly legal.