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Don’t Get Slammed by Check Fraud Scams

Don't Get Slammed by Check Fraud Scams

Don't Get Slammed by Check Fraud Scams

It’s just common sense: If you deposit a check and the funds become available, that means the check was good … right? Actually, it can take weeks before a check is truly “cleared.” “Cleared” means that the issuing bank has verified the check as legitimate and has paid the depository bank. If it turns out the check was fake and you already spent the money, it can really put you in hot water. To protect yourself from a situation like this, let’s go over some common check scams and tips on avoiding them.

Common Check Scams

Fake check scams can take many forms. But no matter the scam, once the check is found to be fraudulent, you could be held liable. So watch out for these common scams:

  • Work-from-home scams: You apply for a remote job, like a virtual assistant position. Once you begin working, you’re given checks to deposit and told they’re from clients. The “employer” instructs you to wire the money minus your “pay.” But after wiring the money, the check bounces and you’re left in the hole.

  • Overpayment scams: The scammer offers to buy an item you’ve posted online. When the scammer sends a check for the purchase, it’s for an amount higher than the agreed price. They then ask for the extra funds to be returned, scamming you out of your money and leaving you with nothing when the check is rejected.

  • Sweepstakes scams: You receive a check in the mail and are informed you just won a sweepstakes. The instructions tell you to deposit the check and send back money to cover taxes and fees. This sounds too good to be true, right? You’re correct. Especially if you had never entered a sweepstakes to begin with.

  • Online dating scams: While browsing an online dating service you instantly connect with someone. Many times they tend to be overseas, but other times they are simply across the country. They typically have convincing stories and you never have the chance to meet them in person. They’ll tell you stories of military service, or working overseas for charity organizations. After feeling comfortable they may attempt to send you checks to “save” or “treat yourself.” They will then quickly ask for the money back to cover emergency expenses such as plane tickets, surgeries, custom fees, or travel expenses. Never send money to someone you have never met in person.

Tips to Avoid Scams

Check scams can be difficult to detect since fake checks usually look just like the real thing, even to professional bankers. So how do you avoid check scams?

  • Don’t accept checks from strangers. You should only accept a check from someone whose identity you can verify. If you must take a stranger’s check, be cautious and don’t immediately withdraw or transfer the funds. If it returns you may very well be held responsible

  • Never use money from a check to wire money or send gift cards. If somebody asks you to do this, you can be sure it’s a scam.

  • Refuse checks for more than the selling price. Ask the buyer to give you a cashier’s check for the proper amount.

  • Consider alternative payment methods. If you don’t know the person paying you, you should insist they pay in cash or with a secure service that offers seller protection, such as PayPal.