In a fake check scam, a person you don’t know asks you to deposit a check and then send a portion of those funds back to that same person or on to a third party. The scammers provide reasons to convince you as to why this must be done. Reasons such as funds are needed to cover mover’s fees, supplies, or taxes owed, or simply an ‘error’ was made that they need your assistance in rectifying. All of these are bogus excuses made up to convince you to send them money.
They will most often ask you to use a different payment method such as gift cards, wire transfers, or more commonly, through a device enabled payment application. Victims of this scam often realize what has happened once the bank notifies them that the check has been returned as a fictitious item.
The most common check scams include:
- Job/Employment Scams – Scammers will post fake job listings online and “hire” victims to perform administrative or business-related tasks. The victim receives a check from their new “employer” for their payroll or as funding to perform a task. The check may arrive via mail, or even FedEx or UPS. Once deposited, the victim is instructed to purchase gift cards; or purchase office supplies, computers, or software; or to send funds to another employee or contractor.
- Online Marketplace Scams – Scammers will search online consumer marketplaces such as Craigslist, Facebook Marketplace, OfferUp, or Letgo, where people are posting everyday items such as furniture, electronics, or housewares to sell quickly. The scammer will pose as a purchaser and send a seller a check that exceeds the purchase price of the item. The scammer will then request that excess funds be sent on to a third party, or returned to them.
Checks and Funds Availability
By law, financial institutions have to make part of the funds from check deposits available quickly, usually within two days. Though it may appear that this check has been ‘cleared’, the check must still be presented for payment to the financial institution the check is drawn on.
There may be a number of reasons that a check is returned unpaid to the bank of deposit, including that the check was determined to be fake. If a check is returned for any reason, the financial institution makes the adjustment from the account it was deposited to.
Therefore, don’t rely on the proceeds from a check unless you can verify the person or entity you received the check from. Always err on the side of caution if you receive a check from a person or company you do not know and contact your financial institution for assistance if you are unsure of the legitimacy of the check.
Fake Checks – What to look for?
Fake checks can be difficult to identify because they assume the appearance of a legitimate check. They are often printed with the names, addresses, and phone numbers of real companies or financial institutions. They can be personal checks or Cashier’s Checks.
Fraudsters use contact information and details for real companies to make the fake appear legitimate. Often legitimate companies are not even aware that their information has been used as part of a scam. Therefore, it is recommended you verify the person or entity listed on the check especially if you are being asked to send funds back.
Steps to Protect Yourself
- Never agree to send any money from check proceeds to someone you do not know, even when that person indicated they overpaid or mistakenly sent you too much money and are requesting it back.
- Always verify any check you receive if you are not familiar with or do not personally know the company or person who gave (or sent) it to you.
- Always review any check you receive from a third party that is “payment” for a good or service. Is the check amount the same amount that was agreed upon? Are there any inconsistencies on the check such as maker information? Utilize an online search engine to research and verify the company or person that gave you the check.
- Never purchase gift cards, send a wire transfer, purchase Bitcoin, or give money to someone you do not know. These payment methods are immediate (similar to giving someone cash) and provide no payment protections. Scammers will usually request these methods because they are quick and scammers can often remain anonymous. Limit your use of applications like Venmo, Zelle, Apple Pay, and Cash App for people you know and trust.
- Never deposit a check you receive via e-mail. No legitimate company or employer will e-mail you a check.
- If you have concerns over the legitimacy of an item you received, contact BankFund for assistance.