Protect Yourself and Report the Latest Frauds, Scams, Spams, Fakes, Identify Theft Hacks and Hoaxes
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If you receive an email or letter in the post / regular mail saying you won a lottery and they send you a check? You just won a foreign lottery? The letter says you did, and all you have to do to collect your winnings is deposit the cashier's check to and wire the money back to cover the taxes and fees. As soon as the courier service gets their fee, you're guaranteed to get your prize. Or you sold something on Ebay and the buyer paid with a check? Or you took out a loan from a distant or online bank and they sent you a check? You can just take the check to your bank and cash it right?
WRONG! And what is worse, if you cash it, in most states in the US, you may be guilty of passing a counterfeit check, money laundering or worse. Clark Howard did a piece on his radio show about a man in California who was arrested for cashing a bogus check. In other words, by merely attempting to cash the check, you could go to federal prison!
The check is no good, even though it appears to be a legitimate cashier's check. The lottery angle or eBay buyer, or a potential tenant for your rental property are just tricks to get you to wire money out of your bank account to someone you don't know.
If you did deposit the check and wire the money, your bank would soon (7 to 21 days later) learn that the check was a fake. And guess who is out of the money? YOU ARE! It is your responsibility to repay the bank, because the money you wired can't be retrieved, and you're responsible for the checks you deposit - even though you don't know they're fake.
ConsumerFraudReporting.org and the Federal Trade Commission both have plenty of examples and have observed that counterfeit check scams are on the rise. Many fake checks look so real that bank tellers are reporting being fooled. The scammers use high quality printers and scanners to make the checks look real. Some of the checks contain authentic-looking watermarks. These counterfeit checks are printed with the names and addresses of legitimate financial institutions. And even though the bank and account and routing numbers listed on a counterfeit check may be real, the check still can be a fake. These fakes come in many forms, from cashier's checks and money orders to corporate and personal checks. Could you be a victim? Not if you know how to recognize and report them.
Counterfeit or fake checks are being used in a growing number of fraudulent schemes, including foreign lottery scams (as described above), check overpayment scams, Internet auction scams, and secret shopper scams.
Check overpayment scams target consumers selling cars or other valuable items through classified ads or online auction sites. Unsuspecting sellers get stuck when scammers pass off bogus cashier's checks, corporate checks, or personal checks. Here's how it happens:
A scam artist replies to a classified ad or auction posting, offers to pay for the item with a check, and then comes up with a reason for writing the check for more than the purchase price. The scammer asks the seller to wire back the difference after depositing the check. The seller does it, and later, when the scammer's check bounces, the seller is left liable for the entire amount.
In secret shopper scams, the consumer, hired to be a secret shopper, is asked to evaluate the effectiveness of a money transfer service. The consumer is given a check, told to deposit it in their bank account, and withdraw the amount in cash. Then, the consumer is told to take the cash to the money transfer service specified, and typically, send the transfer to a person in a Canadian city. Then, the consumer is supposed to evaluate their experience - but no one collects the evaluation. The secret shopper scenario is just a scam to get the consumer's money.
Con artists who use these schemes can easily avoid detection. When funds are sent through wire transfer services, the recipients can pick up the money at other locations within the same country; it is nearly impossible for the sender to identify or locate the recipient.
New variations of fake check scams constantly pop up, but in each case they give you a realistic-looking check or money order and ask you to send cash in return. Here are some of the common scenarios:
Under federal law, banks must make funds available to you from U.S. Treasury checks, official bank checks (cashier's checks, certified checks, and teller's checks), and checks paid by government agencies at the opening of business the day after you deposit the check.
For other checks, banks must similarly make the first $100 available the day after you deposit the check. Remaining funds must be made available on the second day after the deposit if payable by a local bank, and within five days if drawn on distant banks.
However, just because funds are available on a check you've deposited doesn't mean the check is good.
It's best not to rely on money from any type of check (cashier, business or personal check, or money order) unless you know and trust the person you're dealing with or, better yet - until the bank confirms that the check has cleared.
Forgeries can take weeks to be discovered and untangled. The bottom line is that until the bank confirms that the funds from the check have been deposited into your account, you are responsible for any funds you withdraw against that check.
Here's how to avoid a counterfeit check scam:
If you think you've been targeted by a counterfeit check scam, report it to the following agencies:
You can check the name of the issuing bank on the check with the names of banks that have reported stolen checks and you can call the bank to
You can go to this website and verify the routing number on the check and get the bank's phone number, then call the bank to verify that the account is real and the check is real.
If you believe you may have fallen victim to this type of scam and wish to report it, please file a complaint with the U.S. government Internet Fraud Complaints Center
Here is a summary of this type of fraud, from the United States Postal Service
The FTC works for the consumer to prevent fraudulent, deceptive and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid them. Click here to file a FTC Fraud Reporting or to get free information on consumer issues, or call toll-free, 1-877-FTC-HELP (1-877-382-4357); TTY: 1-866-653-4261. The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure online database available to hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.