How to Avoid Check Scams

Scam artists know how to make a fake cashier's check look legitimate.
Scam artists know how to make a fake cashier's check look legitimate. (Image: todaycouldbe/iStock/Getty Images)

Con artists rely on the old adage that there's "a sucker born every minute." Recognizing the warning signs typically involved in fraud is the easiest way to avoid a check scam. Rule number one: Never wire money to someone you don't know. If you avoid doing that, you're far less likely to get caught up in a fake check scam. Rule number two: Most fake check scams involve cashier's checks, which are drawn from a bank's funds and generally considered safe. They are safe, except when they are forgeries ... so always perform due diligence.

Fake Cashier's Checks

Professional scammers can do an excellent job of forging cashier's checks. The American Bar Association warns its members that they, too, can be taken in. The level of sophistication involved in fraudulent cashier's checks means it can take several weeks before the crime is discovered by the bank. The ABA advises contacting the check issuer before depositing the check into your account to ascertain its legitimacy. Don't call any phone numbers listed on the check, as that could be a direct connection to the scammer. Find the phone number of the check's issuer from an independent source. A cashier's check often involves a major purchase, so if you're paid with such an instrument for a car or other big-ticket item, don't release the item until the issuing bank affirms the check's validity.

Check Overpayments

If you're selling a product or service on or offline and someone offers to give you a check in an amount substantially larger than the purchase amount, don't fall for the scam. The "buyer" usually says you should deposit the check, then wire him the additional funds. If you're a gambler, the odds are terrifically in favor of the buyer presenting you with a fake check -- which the bank might initially accept -- and you ending up on the hook for entire amount. Sending money via wire transfer is equivalent to sending cash. If there's merchandise involved and you've already sent it, you're out there, too. There is seldom a good reason for anyone to give you a check in an amount larger than you're requesting.

Winning the Lottery

If you receive a letter crowing that you're the lucky winner of a foreign sweepstakes or lottery, don't start celebrating. It's almost certainly a scam. Generally, the letter includes a certified check covering applicable fees and taxes, which you're instructed to deposit in your bank account and then wire the money immediately to another entity. Once the taxes and fees are received, you'll get your prize. Of course, the check is a fake, but once you've wired off the money you're responsible for the amount when your bank discovers the fraud.

Reporting Scams

If you're the victim of a fake check scam, report the incident to the United States Postal Inspection Service -- if merchandise was mailed -- and to the Federal Trade Commission. You can file a complaint with the FTC online through its Complaint Assistant service. You should also file a report with the office of your state's attorney general.

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