How to Avoid Fake Check Scams
Con artists rely on two basic principles: people love the promise of easy money and they are ignorant of everyday financial transactions. In the case of check or money order scams, they know people are excited to receive a large check in the mail. They also know that very few people understand the process or rules of wire transfers.
What Are Check Cashing Scams?
Money transfers done through checks, cashier’s checks or money orders are extremely hard to track. The process is slower than the transaction, so scammers use this to their advantage.
Banks will deposit a check and release the funds within a day or two. Unfortunately, it can take weeks to discover that a check is counterfeit. Scammers hope the promise of easy money will make victims deposit the checks immediately and send the “overpayment” back to them as requested. Weeks later, the check the victim received bounces. The victim is then liable for the money sent to the scammer. Learn more in our blog post about advanced fee fraud.
Online Purchase Check Scams
Con artists sometimes target people selling an item on sites like eBay or Etsy, purchasing the item and sending a fake check, written for an amount greater than agreed upon. The unsuspecting seller deposits the check, mails the item and sends the difference back, losing not only the money, but also the item they ‘sold.’
Scam Job Offers by Email
In a typical scam job offer, the victim agrees to perform certain work, for which the scammer pays them by check through the mail. When work is done, the ‘employer’ sends a check for a significant amount (sometimes thousands) over the agreed upon pay. The scammer conjures an excuse such as wanting the ‘employee’ to buy supplies, pay taxes or run an errand. With apologies, he or she asks the victim to deposit the check and return the difference.
Fake contests usually involve an unexpected notice of winning a significant amount of money. The victim is asked to simply pay the taxes, insurance or fees on their winnings and then the scammer will send their money. The Federal Trade Commission urges consumers to throw this mail away immediately.
Four Ways to Avoid Check Cashing Scams
- Don’t send money to people you don’t know, even if they claim to be an employer or buyer.
- Do not share personal information (birth date, account numbers or passwords).
- Never prepay anything on monetary awards.
- Avoid dealing with someone who sends you a check for more than the agreed upon amount. Stop the transaction immediately.
If you think you are being targeted by a fake check scam, don’t send the scammer money! Report the incident to the Better Business Bureau.