There are many
variations of the fake check scam. It could be someone offering to buy
something you advertised, pay you to do work at home, give you an “advance” on
a sweepstakes you have supposedly won. Promotions for foreign lotteries
are likely to be fake. Another common scam relates to paying the first
installment on money that you will receive for agreeing to have money in a
foreign country transferred to your bank account for safekeeping. Whatever the
pitch, the person may sound quite believable.
scammers hunt for victims. They scan newspaper and online advertisements for
people listing items for sale, and check postings on online job sites from
people seeking employment. They place their own ads with phone numbers or email
addresses for people to contact them. In addition, they call or send emails or
faxes to people randomly, knowing that some will take the bait.
How does the
If you are
selling something, they say they will pay you by sending you a check for more than the sale price. They tell you to deposit the check, keep what you are owed, and wire the
remaining money to them or a so-called shipping agent. It can take weeks, especially with foreign checks or
money orders, for the banks to receive the checks or money orders back and
determine that they are counterfeit.
If it is part
of a work-at-home scheme, they may claim that you will be processing checks
from their “clients.” You deposit the checks and then wire them the money minus
your “commission.” The problem is that when the bank releases the funds that
the money is often to an address outside the country. After a few weeks, the
bank will notify the person that the deposited checks have been returned, and
now they owe the bank all the money that was withdrawn.
Or they may
send you a check for more than your pay “by mistake” and ask you to wire them
Never agree to
cash checks and send the money somewhere as part of a job working from home.
sweepstakes and foreign money offer variations of the scam, they tell you to
wire them money for taxes, customs, bonding, processing, legal fees, or other
expenses that must be paid before you receive the rest of the money. Never
agree to pay to claim a prize.
Why does it
The fake checks
look real. In fact, they look so real that even bank tellers may be fooled.
These fake checks come in many forms, from cashier’s checks and money orders to
corporate and personal checks. Some are fake cashier’s checks while others look
like they are from legitimate business accounts. The companies whose names
appear may be real, but someone has altered the checks without their knowledge.
You do not have
to wait long to use the money, but that does not mean the check is legitimate.
Under federal law, banks generally must make funds available to you from U.S.
Treasury checks. Most other governmental checks, and official bank check
(cashier’s checks, certified checks, and teller’s checks), funds are available
a business day after you deposit the check. For other checks, banks must make
the first $200 available the day after you deposit the check, and the remaining
funds must be made available on the second business day after the deposit. Just
because you can withdraw the money does not mean the check is good, even if it
is a cashier’s check. It can take weeks for the forgery to be discovered and
the check to bounce.
responsible for the checks you deposit!
That is because
you are in the best position to determine the risk – you are the one dealing
directly with the person who is arranging for the check to be sent to you. When
a check bounces, the bank deducts the amount that was originally credited to
your account. If there is not enough to cover it, the bank may be able to take
money from other accounts you have at that institution, or sue you to recover
the funds. In some cases, law enforcement authorities could bring charges
against the victims because it may look like they were involved in the scam and
knew the check was counterfeit.
How can you
avoid being scammed?
Know who you
are dealing with. In any transaction, independently confirm the buyer’s name,
street address, and telephone number.
Do not accept a
check for more than the selling price, no matter how tempting. Ask the buyer to
write the check for the correct amount. If the buyer refuses to send the
correct amount, return the check. Do not send the merchandise.
If you accept
payment by check, ask for a check drawn on a local bank, or a bank with a local
branch. That way, you can make a personal visit to make sure the check is
valid. If that is not possible, call the bank and ask if the check is valid.
Get the bank’s phone number from directory assistance or an Internet site that
you know and trust, not from the person who gave you the check.
alternative method of payment. As a seller, you can suggest an escrow service
or online payment service. There may be a charge for an escrow service. If the
buyer insists on using a particular escrow or online payment service you have
never heard of, check it out. Visit its website, and read its terms of
one or if you call and cannot get answers about the service’s reliability, do
not use the service.
If the buyer
insists that you wire back funds, end the transaction immediately. Legitimate
buyers do not pressure you to send money by Western Union or a similar company.
In addition, you have little recourse if there is a problem with a wire
transaction. There is no legitimate reason why anyone who wants to give you a
check or money order would ask you to send money anywhere in return.
pressure to “act now.” If the buyer’s offer is good now, it should be good
after the check clears the issuing bank.
Throw away any offer that asks you to
pay for a prize or a gift. If it is free or a gift, you should not have to pay
for it. Free is free.
Resist the urge
to enter foreign lotteries. If you play a foreign lottery through the mail or
over the telephone, you are violating federal laws.
(Taken from the
Federal Trade Commission fact sheet “Check Overpayment Scams”)