The most common type of scheme involves a counterfeit cashier’s check, traditionally considered a trusted form of payment. Unfortunately, the advent of high-quality printers and scanners is making it easier for counterfeiters to produce official-looking checks of all types and caliber, including cashier’s checks.
The problem occurs when a consumer deposits the counterfeit check in a bank account and, a day or so later, asks the financial institution if the money is “available.” When told yes, the consumer assumes that he/she can safely draw upon that money.
That is not the case! Until the financial institution can confirm the funds have been “finally collected,” the consumer is responsible for any funds he/she may withdraw against that check deposit.
The amount of time it can take for the bank to finally collect the money can vary, particularly with out-of-state or out-of-country checks.
In most cases, victims report that they wired money to the check issuer only to find that the deposited check bounced and was uncollectible.
This has happened to consumers who were told that they won an international lottery and were advised to pay a clearance fee or taxes out of their “winnings” check; consumers who responded to work-at-home opportunities and were told to deposit a cashier’s check and then wire money elsewhere; and to online auction sellers who accepted certified checks for payment from far-away buyers and sent the merchandise, only to discover later that the checks were counterfeit.
With overpayment scams, fraudsters play the role of buyer and target consumers selling a product or service. It sometime works this way: The buyer “accidentally” sends you a check for more than the amount they owe you.
They ask you to deposit it into your bank account and then wire them the difference. A deposited check can take several days or more to clear. When the original check turns out to be a fake and bounces, the victim is still on the hook to pay the bank back for any money withdrawn.
Job scams have many different twists. Scammers may ask job seekers to pay up front for training, which never materializes, or they may “hire” you and send a fake check. The con artists will instruct you to deduct a fraction for payment and wire the rest back.
Other scams ask you to complete an online application that requests personal identifying information and bank account numbers that can be used for identity theft.
Fake checks can be used for any type of scam, so always wait for a deposit to clear before writing checks against the funds.
Tips to Avoid Fake Check Scams:
Start with Trust®. Check with the Better Business Bureau before doing business. BBB works for a trustworthy marketplace by maintaining standards for truthful advertising, investigating and exposing fraud against consumers and businesses.
Reproduced with permission from the Better Business Bureau – August 2014 Bulletin