If you thought fake check scams were a thing of the past, think again. It’s true that many people no longer write checks or do so infrequently. However, that hasn’t stopped criminals from using fake checks to separate victims from their hard-earned money.
According to a recent Better Business Bureau report, the average loss in a fake money order or check scam last year was $1,679. Data released by the Federal Trade Commission estimated a median loss of $1,988 in 2019, with a total loss to consumers of more than $28 million. By learning more about fake check scams, you can help make sure you’re not the next victim.
How Do Fake Check Scams Work?
Criminals carry out fake check scams by convincing consumers to deposit fake checks into their personal bank accounts. Then, they instruct the victim to immediately withdraw some of the funds from the deposit and send it back to the criminal as a wire transfer. By the time the bank rejects the check, the criminal has disappeared.
Common Fake Check Scams
- Mystery Shopping Check Scam – The victim is “hired” as a mystery shopper and asked to visit a financial establishment for the purpose of sending a wire transfer. They are given fake checks to deposit into their personal bank accounts with the instructions to then use their personal accounts to send the wire transfer.
- Prize Claim Check Scam – The victim is told they’ve won a sweepstake or prize drawing. They’re issued fake checks for their winnings and are instructed to send funds to cover processing fees or other fake expenses. The reward checks do not clear the bank, and the victim cannot get a refund on those fees.
- Overpayment Check Scam – The victim sells an item online and receives a check for payment, but the amount is much higher than the buyer owed. After depositing the check, the buyer says it was an accident and asks the victim to withdraw the overage from their account. The victim sends the overage to the buyer, and then the check is not honored by the bank.
How to Recognize a Fake Check
The simplest way to avoid a fake check scam is to never deposit a check from someone you don’t know very well on personal terms. If you sell products or services online, there are many ways to collect payment without accepting checks.
If you are offered a check, go through these steps:
- Consider the source of the check. How well do you really know the person issuing it? Do you have solid identification and contact information for them? Is there no other way of collecting payment?
- What bank is listed on the check? Is it a legitimate bank? If so, consider taking the check to the bank rather than depositing it into your account.
- Does the check look legitimate? Terms like “original document” are often printed somewhere on the check. With microprinting and security screens widely used by legitimate banks, it’s sometimes easy to spot a check printed on fake paper with no security measures.
If you do fall victim to a fake check scam, the following resources can help you file a report:
- The FTC’s Complaint Assistant U.S. Postal Inspection Service if fake checks are received in the mail.
- The Internet Crime Complaint Center if the check scam took place online
- Your local attorney general
- Your bank and the bank listed on the check.
Remember, the safest deposit is the one you never make.