Fraud Facts – Check Scams

CPort Blog Post Image 2 Check Scams

We know since the start of the pandemic scammers have been targeting people daily and their tactics continue to get more and more sophisticated. Right now, we’re noticing check scams are on the rise. Check scams can be used in a variety of ways, we wanted to share a few examples from the Federal Trade Commission with our members on what you should be on the lookout for and some tips to keep in mind:

Mystery shopping
Scammers pretend to hire people as mystery shoppers and tell them their first assignment is to evaluate a retailer that sells gift cards, money orders, or a money transfer service, like Western Union or MoneyGram. The shopper gets a check with instructions to deposit it in a personal account and wire it to someone else. But once the money is wired, the person on the other end can disappear.

Claiming prizes
Sweepstakes “winners” are given checks and told to send money to cover taxes, shipping and handling charges, or processing fees. But that’s not how legitimate sweepstakes work.

People buying something from you online “accidentally” send a check for too much and ask you to refund the balance. Only after you send the extra money, do you realize the check bounced.

Employment Opportunities
With more and more job interviews happening remotely, it’s a new twist to an old scam. A fake recruiter reaches out to you saying they have an employment opportunity, and you are perfect for the job. Once hired, the new employer sends a check to deposit into your bank account, because the company requires you to purchase supplies from a specific store in order for you to start the job. Unfortunately, the supplier is part of the scam. The check bounces, money is taken out of your account, you never receive any supplies and the employer disappears. Of course, there never really was a job to begin with.

Why is it so easy to fall victim to a scam?
Many people are susceptible to check scams because to the eye, fake checks look like ordinary real checks, even to actual financial institution employees! Fake checks are often printed to include the names and addresses of legitimate financial institutions. They may even be real checks written on accounts that belong to identity theft victims. It can take weeks for a financial institution to figure out that the check is a fake.

Fake Checks and Your Financial Institution
By law, financial institutions have to make deposited funds available usually within two days. When the funds are made available in your account, the bank may say the check has “cleared,” but that doesn’t mean it’s a good check. Fake checks can take weeks to be discovered and untangled. By the time a fraudulent check is discovered, the scammer has any money you sent, and you’re stuck paying the money back to the financial institution.

Your best bet: Don’t rely on money from a check unless you know and trust the person you’re dealing with.

Proactive Steps to Avoid a Check Scam

  1. Never use money from a check to send gift cards, money orders, or wire money to strangers or someone you just met. Many scammers demand you send money through money transfer services like Western Union or MoneyGram or buy gift cards and send them the PIN numbers. Once you wire money, or give someone the gift card PINs, it is like giving someone cash. It’s almost impossible to get it back.
  2. Toss offers that ask you to pay for a prize. If it’s free, you shouldn’t have to pay to get it.
  3. Don’t accept a check for more than the selling price. You can bet it’s a scam.

What to Do If You Sent Money to a Scammer
If someone demands payment by gift card, they are more than likely a scammer. If you paid a scammer with a gift card, tell the company that issued the card right away. When you contact the company, tell them the gift card was used in a scam. Ask them if they can refund your money. If you act quickly enough, the company might be able to get your money back. Also, tell the store where you bought the gift card as soon as possible.

If you think you’ve been targeted by a fake check scam, report it to: