Counterfeit Checks
Credit unions and banks
report daily that their official checks and cashiers checks are being
counterfeited. Many of these checks are being used to scam victims into
wire transferring large amounts of money to financial institutions,
including foreign banks. Counterfeit checks scams that originate through
the Internet have been increasing over the past several months and are causing
losses in the thousands of dollars to consumers. The tips listed below include
key information that can assist consumers in not becoming a victim of
Counterfeit Check Scams.
Tips for Recognizing and Avoiding Counterfeit Check
Scams
- There are many variations of
the counterfeit check scam. It could start with someone offering to buy
something you advertised, pay you to do work at home, give you an
“advance” on a sweepstakes you’ve supposedly won, or pay the first
installment on the millions that you’ll receive for agreeing to have money
in a foreign country transferred to your account for safekeeping. Whatever
the pitch, the person may sound quite believable.
- Counterfeit check scammers hunt
for victims. They scan newspaper and online advertisements for people listing
items for sale, and check postings on online job sites from people seeking
employment. They place their own ads with phone numbers or email addresses
for people to contact them. And they call or send emails or faxes to
people randomly, knowing that someone will take the bait.
- They often claim to be in
another country. The scammers say it’s too difficult and complicated to send you
the money directly from their country, so they’ll arrange for someone in
the U.S. to send you a check.
- They tell you to wire money to
them after you have deposited the check. If you are selling something,
they say they will pay you by having someone in the U.S. who
owes them money send you a check. It will be an overpayment
from the sale price; you deposit the check, keep what you are owed and
wire the rest to them. If it’s part of a work-at-home scheme, they may
claim that you will be processing checks from their “clients.” You deposit
the checks and then wire them the money minus your “pay.” Or they may send
you a check for more than your pay “by mistake” and ask you to wire them
the excess. In the sweepstakes and foreign money offer, they tell you to
wire them money for taxes, customs, bonding, processing, legal fees or
other expenses that must be paid before you can get the rest of the money.
- The checks are counterfeit but
they look real. In fact, they look so real that even tellers may be fooled. Some
are phony cashier’s checks; others look like they are from legitimate
business accounts. The companies whose names appear may be real, but
someone has dummied up the checks without their knowledge.
- You do not have to wait long to
use the money, but that does not mean the check is good. Under federal law (Regulation
CC), financial institutions have to make the funds you deposit available –
usually within one to five business days (sometimes
longer), depending on the type of check. But just because you can withdraw the money does
not mean the check is good, even if it’s a cashier’s check.
It can take weeks for the counterfeit or forgery to be discovered and the
check to be returned as counterfeit.
- You are responsible for the
checks you deposit. That is because you are in the best position to
determine the risk – you are the one dealing directly with the person who
is arranging for the check to be sent to you. When a check is returned
unpaid, the financial institution deducts the amount that was originally
credited to your account. If there is not enough to cover it, the
financial institution may be able to take money from other accounts you
have at that institution, or sue you to recover the funds.
- There is no legitimate reason
for someone who is giving you money to ask you to wire money back. If a stranger wants to pay you
for something, insist on a cashiers check for the exact amount, preferably
from a local credit union or bank, or a credit union or bank that has
a branch in your area.
- Don’t deposit it – report it! Report counterfeit check
scams to the National Fraud
Information Center/Internet Fraud Watch, a service of the
nonprofit National Consumers
League, at www.fraud.org
or (800) 876-7060. The information will be transmitted to the appropriate
law enforcement agencies.
“Reprinted with permission of the
Credit Union National Association (CUNA Mutual)”
Additional Sources: Kansas Credit Union Association and Internet
Fraud Complaint Center