Source: 2019-20 Consumer Sentinel Report
"The check's in the mail" is one of the oldest scams in the book. But even in today's online world, surprisingly little has changed when it comes to people trying to get away with using a fake check.
Fake check scams, quite simply, are schemes that involve fake checks or phony cashier's checks, which are always used to the scammer's advantage.
The plots can vary and often even seem advantageous for the person being scammed: You may be offered more money to purchase something than you were asking for, be told you won sweepstakes, or even be offered a "job" that involves a fake check.
And unfortunately, these schemes are typically successful for various reasons.
Banks are required to make any deposited funds available to you quickly, but it could be weeks before they investigate the source of the money. So you could believe a check is "cleared" and even use it to withdraw funds, but still face the consequences weeks later if it turns out to be fake.
Plus, fake checks can be made to look very real. Even bank employees can struggle with telling if a check is fake or not.
In fact, in 2019 alone, more than 27,000 fake checks were reported to the Federal Trade Commission (FTC), worth more than $28 million in fraudulent payments. According to the government body, young adults—especially those in their early 20s—were the most widely-targeted group for fake check scams.
Generally, the plots allow scammers to get something from you for nothing, whether that's a tangible item or the actual money the fake check is supposedly worth. Still, there are a few tell-tale signs that may help you determine whether you're receiving a legitimate payment or if that check isn't worth the paper it's printed on.
Since the only common thread in fake check scams is the actual fake check, these types of fraud can be wrapped up in several different plots.
Cashier's checks are slightly different than personal checks. These checks come from—and are signed off on by—a financial institution, so it's the bank, rather than the checking account holder, who guarantees the payment.
Because of this, cashier's checks are often considered "safer" forms of payment, especially for expensive purchases. But this is also what makes them so susceptible to scams.
In fake cashier's check scams, the scammer will send you a fake version of these "guaranteed" payments, then ask you to wire them money or send them goods in return. And since it takes days to weeks for the check to process, the scammer will already have what they want by the time you're informed that the check is fraudulent.
Mystery shopper plots are very common and represent nearly 25% of all fake check scams.
These schemes involve a scammer "hiring" you to evaluate a business that sells gift cards or provides money transfer services. You'll be mailed a fake check and told to deposit it, then wire the amount or send the equivalent amount in gift cards to someone else—in the name of "evaluating" the service.
But the check is fake, so the money you send is actually yours, and the person you're sending it to is actually the scammer.
Another popular plot, these scams also represent roughly 25% of the fake checks reported to the FTC in 2019.
In car wrap decal scams, you'll be contacted by someone who wants to use your vehicle for advertising their product. They'll send you a check, both to pay you for the opportunity and to pay the decal agent to put the wrap on your car. The catch? The check is fake, and the decal agent is the scammer—so you'll end up just sending your own money away.
Hardly anyone can resist a prize, which is why sweepstakes giveaways are perennial plot devices when it comes to scams.
In this instance, you're told you won a sweepstake—and the check you're given is your winnings. But then you'll be asked to pay money to cover taxes or fees, which will actually go to a scammer instead. And, eventually, you'll find out that the "winning" check is no good.
Scammers often use this form of fraud when purchasing something from someone online.
Representing as much as 18% of the fake check scams reported in 2019, these overpayment schemes involve someone sending you a check to pay for your items. They'll either offer to pay you more than you're selling it for or "accidentally" overpay you and ask you to send back the difference.
You're paid with a fake personal check or a fake cashier's check in either scenario.
Fake check scams can't happen without the phony check. So paying particular attention to why you're getting a check is a great way to figure out whether or not it's real.
Many fake checks or fake cashier's check stories will include some of these types of details:
Learning to tell if a check is fake is another way to avoid fake check scams. This can be pretty tricky, even for seasoned bank employees, but there are some details scammers may skimp out on, including:
Fake check scams aren't only common; they're on the rise, with 2019 seeing the number of reported scams jump up 65% from 2015 levels.
The key to beating fake check scams is to wait for the check to clear with your bank before sending any money or items. Note that this can take a few days, sometimes even about a week. Wait until the deposit in your bank statement no longer says "Pending" and has fully cleared.
But there are still some ways to avoid becoming the next victim, including:
And, as always, the best way to avoid a scam is to follow your gut. If something feels off—it probably is.
Another reason fake check scams are so popular is that they're challenging to track or undo once they're done.
If you deposited the fake check into your bank account, not only will you not receive the money—or have it taken away from you—you could also possibly face some pretty severe consequences.
Still, if you think you're the victim of a fake check scam, there are still a few options left for you.
If you paid a scammer using gift cards, money order, wiring, or transfer service, you should contact that company as soon as possible to report the problem.
You should also immediately contact your financial institution to report the issue.
And you can—and should—always file a complaint with the Federal Trade Commission.
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