Beware of fake check scams

There are many versions of a fake check scam, but the result is the same. Scammers lure their victims into depositing a cashier’s check, money order or other checking instrument from someone they don’t know and then wiring or sending money to the scammers.

How do the scams work?

Let’s say you have sold something online. If you’re being scammed, the buyer will send you a check made out for more—sometimes thousands more—than needed to cover the purchase price. They will have a good reason for this overpayment. They may say they don’t know how much shipping will be, they need you to cover taxes or fees, or they need you to buy supplies. They will instruct you to keep what you need and wire the balance to them or to a third party. They may ask you to send cash, gift cards, a wire transfer, ACH payment, P2P transaction (like Venmo, Zelle or Pay-It-Now), or even a personal check.

There are many variations on the scam. Someone may offer to:

• Buy something you are selling
• Pay you to work from home
• Give you an advance on sweepstakes winnings

The scenarios are endless, and constantly evolving.

Why do these scams work?

These scams work because the counterfeit checks look like real checks. Sometimes they are real checks drawn on the accounts that belong to victims of identity theft. It can take weeks for a financial institution to figure out a check is fake.

When you deposit a check, by law the financial institution must make at least some of the funds available to you within a matter of days. When the funds are made available in your account, the check is said to have “cleared,” but that doesn’t mean it is a good check. It could take days or even weeks to discover that the deposited check was fraudulent.

The scam depends on you taking action quickly. The scammer will pressure you into sending the money shortly after depositing the check. This is a red flag, and you should not be pressured into wiring funds or sending cash after depositing a check. Once the check is discovered to be fraudulent, the damage may already have been done. A victim who wires or sends funds from such a check may be responsible for reimbursing the financial institution for that amount.

What to do if you’re a victim

If you think you or someone you know was the victim of a fake check scam, consider taking the following steps:

• Contact your local law enforcement agency to report the scam.
• Contact your state’s attorney general. 
• File a complaint with the Federal Trade Commission. 
• If you or the victim is an older adult or a person with a disability, contact your local adult protective services agency. You can find local support resources using the online Eldercare Locator or by calling 800-677-1116.

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