Even as digital transactions become increasingly common, many individuals and businesses still rely on the perceived security of paper cashier’s checks or official bank checks, especially for significant payments. These types of checks are often favored over personal checks because they suggest the funds are secured by the issuing financial institution. However, this sense of security can be misleading, as counterfeit checks pose a considerable risk.
Criminals exploit this trust by using sophisticated technology to create fake checks that are nearly indistinguishable from genuine ones. These fraudulent instruments are central to various scams designed to trick victims into depositing the check and then sending funds back to the scammer before the bank identifies the check as fake. Victims are often instructed to return funds via cash, personal checks, prepaid cards, gift cards, wire transfers, ACH payments, or P2P transactions.
Once a deposited check is discovered to be counterfeit, the account holder is typically liable for the lost funds. Therefore, understanding how to recognize a fake check is crucial for protecting yourself from these scams. Scammers are constantly evolving their tactics, making vigilance essential. Here are some prevalent fake check scams and advice on how to detect them.
Common Fake Check Scams
Fake checks are frequently used in scams that prey on financial hopes and opportunities. Here are three common scenarios to be aware of:
Lottery and Sudden Riches Scams
In these scams, victims are informed they have won a lottery, often from a foreign country, or are entitled to an inheritance. To “claim” their winnings or inheritance, they are instructed to pay upfront “taxes and fees.” Victims receive a fake cashier’s check, are directed to deposit it, and then wire back funds to cover these purported taxes and fees. The promise of unexpected wealth clouds judgment, making individuals vulnerable to this classic scam.
Online Auctions and Overpayment Scams
Scammers often target online auction and classified listing sites, posing as buyers interested in items for sale, advance payment for services, or apartment rentals. They send a cashier’s check for an amount exceeding the agreed price. They then contact the seller, feigning an error, and request the “excess” funds to be returned quickly. The goal is to have the victim deposit the fake check and send back real money before the check bounces, leaving the victim financially compromised.
Secret or Mystery Shopper Employment Scams
These scams advertise work-from-home job opportunities, often as secret or mystery shoppers. New “employees” might receive a seemingly legitimate check as a bonus or to cover “account activation” costs. Alternatively, they might be tasked with evaluating money transfer services. In this scenario, the scammer sends a fake check, instructs the victim to deposit it, withdraw the cash, and then use a money transfer service to send the funds to the “employer,” supposedly to assess the service quality. In both cases, the scammer aims to extract funds before the victim realizes the initial check was fraudulent.
How to Identify a Fake Check
Identifying a counterfeit check through physical inspection alone can be challenging. However, several red flags can help you determine if a check is potentially fake:
-
Verify the Issuing Bank: Ensure the check originates from a legitimate bank. While some fake checks use names of real banks, others may list fictitious institutions. Utilize the FDIC’s BankFind tool to confirm the legitimacy of U.S. banks. This resource helps you verify if the bank is FDIC-insured and actually exists.
-
Contact the Bank Directly: Independently verify the check’s authenticity with the purported issuing bank. Crucially, find the bank’s official phone number on their official website or through a trusted directory, not from the check itself, as this number could be controlled by the scammer. Call the official number and inquire about the check’s validity, providing the check number, issue date, and amount.
-
Assess the Context: Carefully consider how and why you received the check. Be highly suspicious if an unsolicited payment comes from someone you don’t know. Scammers often use email or text messages for communication, which may contain grammatical errors and misspellings. Unsolicited checks are almost always a scam.
-
Examine the Mailing Origin: Check the check’s postmark. If the postmark location differs from the supposed issuing bank’s city and state, it’s a warning sign. Exercise extreme caution if the check was mailed from overseas, as this is a common tactic in international scam operations.
-
Confirm the Check Amount: Verify if the check amount aligns with what you expected. Fake checks are frequently written for amounts greater than what is owed, designed to trick victims into returning the “overpayment.” This overpayment request is a major red flag for a fake check scam.
-
Inspect Security Features: Authentic checks typically include security features like watermarks, security threads, and color-changing ink. While scammers may attempt to replicate these, the quality is often poor. Examine the check closely for these features and their quality. Lack of these features or poorly executed versions are strong indicators of a fake check.
What to Do If You’ve Been Scammed
If you suspect you’ve been a target of a fake check scam, immediate action is necessary. Report the incident to the following agencies:
- Financial Institution: Notify your bank immediately if you deposited a fake check. They can provide guidance and take steps to minimize further financial impact.
- U.S. Postal Inspection Service: If the scam involved mail, report it to the U.S. Postal Inspection Service to help them track and investigate mail fraud.
- Federal Trade Commission (FTC): File a report with the FTC online at ReportFraud.ftc.gov or by phone at 1-877-FTC-HELP (1-877-382-4357). The FTC collects data on scams and provides resources to victims.
- Internet Crime Complaint Center (IC3): If the scam originated online, file a complaint with the IC3, a partnership between the FBI and the National White Collar Crime Center.
In addition to these steps, inform the website or online platform where you encountered the scammer, such as auction sites or job boards. This helps them prevent the scammer from targeting others.
For further assistance and information, visit FDIC.gov or contact the FDIC toll-free at 1-877-ASK-FDIC (1-877-275-3342). Reporting scams and staying informed are vital in protecting yourself and others from financial fraud.
