Fake Checks

And what to look for when you’ve “won the prize, lottery, or earned some easy money.”

Check scams continue to get the best of their unsuspecting victims. Consumer.ftc.gov, the website for the FTC (Federal Trade Commission), works to prevent fraudulent, deceptive, and unfair business practices in the marketplace. The agency also offers a wealth of info to help you avoid “being taken,” sharing common counterfeit scams to avoid:

Winning a foreign lottery

You receive a letter and cashier’s check in the mail. It looks completely valid, and the letter may say something similar to “you’ve won a foreign lottery.” Supposedly, the check is issued to cover the necessary taxes and fees.

Your instructions?

Simply deposit the “check” and wire the money back to the sender to cover your taxes and fees. You’ll receive your payment when they receive yours.

Stop. Right. There. It’s a scam.

The only one who receives any “winnings” is the fraudster. With technology and high-quality printers, the crooks can easily fool the recipient with a check that looks valid and entirely real. But in reality, the check is bogus.

According to the Consumer.ftc.gov website, the lottery angle is a trick to get you to wire money to someone you don’t know. “If you were to deposit the check and wire the money, your bank would soon learn that the check was a fake,” explains the site. “And you’re out the money 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.”

Foreign lotteries illegal to play through the mail or via a telephone offer and most are a hoax.

Resourceful crooks

Unfortunately, human ingenuity doesn’t stop with the honest. Crooks have invented many variations of the above scam to watch out for, including:

  1. Check Overpayment & Internet Auctions – These target consumers who are selling items online, either through a classified ad or online auction site – and typically for higher ticket items like a car.According to Consumer.ftc.gov: 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.
  2. Secret Shopper – Here you’re asked to be a secret shopper and evaluate a “money transfer service.”According to Consumer.ftc.gov: the unsuspecting consumer is hired to be a secret shopper and asked to evaluate 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. It is often to a person in a Canadian city. The individual is then asked to evaluate their experience. But in reality, no one collects the evaluation. It’s just a scam to get money.

Why you’re the one ultimately responsible.

First, it’s important to understand how checks clear and the timeline it takes.

Credit unions and banks must make your deposit available from most “official checks,” including U.S. Treasury checks, other governmental checks, cashier’s checks, certified checks, and teller’s checks, one business day after you deposit the check.

For payroll or personal checks, the first $200 must be made available the day after you deposit the check. Remaining funds must be made available on the second business day after you deposit the check, unless the teller has reason to place an additional hold on the funds.

Here’s the rub:

Just because the funds are made available from your financial institution does not guarantee that the check is valid. It is only after your financial institution verifies that the check has cleared will you know if the check was good. And until the check clears, the responsibility for the funds are yours.

Tips to help you take care:

  • Shred any solicitation asking you to pay up front for a prize, cash or gift.
  • Never send money to (or do business with) strangers.
  • When selling online, never accept more than your asking price; ask the buyer to write the check for the exact amount. If the buyer does not send the correct amount, return the check. Do not send the merchandise.
  • Avoid using an unknown or suspicious online payment service. Check first to see if it’s valid. Consumer.ftc.gov suggests calling its customer service line, visiting the website, reading the company’s terms of agreement or privacy policy. If you can’t get verification or have a bad feeling, don’t use the service. If you take a personal or cashier’s check for payment, it’s safer if drawn on a local financial institution so you can verify funds.
  • Never “wire back” funds. Legitimate buyers will not request or require you to send money by wire transfer services.
  • Avoid “limited time” or “act now” offers.

Our best advice? Remember, if it sounds “too good to be true,” it probably is.

If you need help sifting through the scams, please call us. We can look at any offer you receive and provide our opinion. If you think you have already fallen victim, report the scam immediately to one of these U.S. government agencies:


Sources:

https://www.consumer.ftc.gov/articles/0159-fake-checks
https://www.ftccomplaintassistant.gov/#&panel1-1
https://postalinspectors.uspis.gov/

 

2017-02-24T09:12:11+00:00 February 24th, 2017|