Have you received a fake check in the mail?
- Kim Thompson: Better Business Bureau
- February 19, 2020
- 1396
If someone you don’t know sends you a check and asks for money back, that’s a scam. Fake-check scams take many different forms such as those involving phony job and income opportunities, online classified ad sales, and others. However, the underlying con is the same.
Scammers take advantage of the fact many people don’t understand the rules about check deposits and wire transfers. It is sometimes called the “overpayment scam” because it involves a large initial payment to the target, much more than they are owed for the transaction, with a large refund back to the scammer.
The stories con artists use vary widely. You might be selling something online and the scammer pretends to be interested in a purchase. Or scammers announce you’ve won a sweepstakes prize. In all cases the scam begins with a person you don’t know sending you a check. The amount is usually for more than you are owed, so you are then asked to deposit the check, keep the amount owed and send the difference back, often by wire transfers or gift cards, to them or another person.
The scammers always have a good story to explain the overpayment. They might say they are stuck out of the country, they need you to cover taxes or fees, you’ll need to buy supplies, or something else.
Here is the issue. When you deposit the check, your bank typically makes the funds available to you within a day or two. However, fraudulent checks can take weeks to be discovered by the bank. Eventually the check bounces, but in the meantime you have already wired back the “overpayment” to the scammer or sent it via prepaid gift cards. Both forms are like sending cash. Once the money is gone, it is very hard to trace. The scammer has the money you sent, and you are stuck paying the bank back, plus the additional fees.
According to the FTC, over the last several years, the number of fake-check scams reported has steadily increased and so have the dollars lost. The FTC reports consumers lost more than $28 million to fake-check scams in 2019 alone with the average loss per consumer at $1,988. That’s more than six times the median loss on all frauds tracked by the FTC.
Be immediately suspicious of overpayments. A check can bounce even after your bank allows you to withdraw cash from the deposit. Even if a bank representative tells you a check has “cleared,” you can’t be sure it won’t be detected as a fake weeks later. One thing you can be sure of is you’ll be on the hook for any funds drawn against the amount.
Never send money to people you don’t know, especially if they ask for the money in an unusual form such as wire transfer or prepaid debit card. Do not share personally identifiable information such as date of birth, bank or credit card accounts, and passwords with anyone you do not know. Don’t prepay taxes, insurance or fees on something you have supposedly won.
To learn more, visit www.ftc.gov/fakechecks. If you have been the victim of this or another scam, make others aware by filing a report on www.BBB.org/ScamTracker.
Visit www.bbb.org/canton or call 330-454-9401 to look up a business, file a complaint, write a customer review, read tips, follow us on social media and more.