That Check Is FAKE!

November 18, 2019

By Kirtland FCU Security Team

Fraud, Insighter, Security

“It’s an older scam, sir, but it checks out.”

If you’re holding a check, made out to you, you’re going to want to read this before cashing it. Fake check scams have been around for a long time. Technology has opened up new avenues of implementing the scam, but the scam itself remains relatively unaltered. If someone you don’t know wants to pay you by check, be aware—it could be a scam. It could start with someone offering to buy something you’ve advertised on Facebook or Craigslist. It could come in the form of a supposed job opportunity! Or, it could be an even more enticing story of a sweepstakes win! Whatever the method, this scam is still in play for one reason: it works.

According to the Better Business Bureau’s 2018 Scam Tracker Risk Report, check fraud exposure (the likelihood of being targeted by a given scam) nearly doubled from 2017 with a median loss of $1,500 per incident! Fake checks are also a tactic in other types of scams, including employments scams.

Three Common Check Fraud Scams

The Craigslist Overpayment – This one doesn’t have to be on Craigslist, but it will begin with the victim listing an item for sale, in a newspaper or online on Facebook or Craigslist. A buyer will send the victim a check for the item in a greater amount than the buying price. They’ll make up a convincing excuse and ask the victim to deposit the check and then withdraw the overpaid amount and send it back, usually in the form of a gift card. The check will bounce, and the victim is on the hook for the whole amount.
The Employment Advance – This tactic is a crossover with employment scams. Usually, the victim will receive a fantastic job offer and an advanced check to cover supplies or training. The rest of the story follows the same path as the overpayment scam above.
Winners! – In this one, the victim will receive a check to cover “taxes” on a fictional prize. The victim then pays the “taxes”. A few days later, the check bounces, and the victim is left confused—and broke.

Source: BBB 2018 Scam Tracker Risk Report

If you do deposit a check that is not from a friend or family member, wait at least two weeks to be sure it clears before spending any of the money.

If the check is indeed fake and bounces, you will not be out any of your own money. If you’re receiving pressure to do so, it’s a big red flag that the check may be fake.

How To Avoid These Scams

You can save yourself a big headache by taking these simple steps.

Inspect the check
- Is the amount what you expected? There is NO LEGITIMATE REASON TO WRITE A CHECK FOR MORE THAN A NEEDED AMOUNT. Make sure the check matches the transaction.
- Also, check the personal details on the check. Look up the bank or business associated with the check and call to confirm its validity.
- If certain items such as a signature, address, or bank logo that are usually on a check are missing, or words are misspelled, don’t cash it.
Consider the reason for the check
- Did you prompt the sending of the check, or did it suddenly appear in your mailbox? Take some time to do a little sleuthing. Research the person or company the see if the payment makes sense. Trust your instincts! If it seems too good to be true, well, it likely is.
Don’t use the money
- If you have a check that doesn’t pass the sniff tests listed above, and you haven’t cashed it yet, DON’T. Contact your credit union to discuss your concerns. If you already cashed it or deposited it, don’t spend the money. Credit unions and banks are required to make your deposited checks available to you within a certain period—for example, a government or cashier’s check is required to be cleared one business day after deposit. If the check has not yet been identified as fake, that money would still be available to you, even though the check is bad. Once the bounce happens, banks and credit unions have the right to withdraw the check from your account, even if you already spent the funds. If your balance can’t cover that amount, you could be facing negative balances and many more headaches.
Alert the authorities
- Notify your credit union or bank if you think you’re holding a bad check or are being scammed. Also, report the fraud to the Federal Trade Commission. If the check was mailed to you, you’ll want to also alert the U.S. Postal Inspection Service online or by calling 1-877-876-2455. If the scammer contacted you online (as in the Craigslist scam), file a complaint at the FBI’s Internet Crime Complaint Center.

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That Check Is FAKE!

Three Common Check Fraud Scams

How To Avoid These Scams

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