My bank has informed me that a cheque i paid in from a purchaser for my car over the internet was fraudulant, i have taken the remainder of the purchase price and forworded the rest by western union transfer back to the purchaser as arranged, am i liable to pay this back, or was the bank wrong to cash it.
I think you will find this is a con - ebay do warn about this type of transaction - i assume you are in the USA.
I thikn you will find that the purchaser gave you an overpayment of the amount and then asked you to refund the money. He has then asked for a refund for his accident which you have done. His cheque doesn't go through so you are out of pocket!
I am afraid you will need to contact the police/fraud squad and obviously ebay (or whoever)