How to Identify Fraudulant Cashier's Checks

A cashier's check is a check from a bank that's drawn from the bank's funds and authorized by the bank's cashier. The benefit of receiving a cashier's check is that it can't bounce, because the amount written on the check is paid when the check is issued by the bank. However, fake checks of all kinds, including cashier's checks, are a part of many common scams. Understanding more about cashier's checks and how they work will help protect you from scams involving fake cashier's checks.

Instructions

1. Wire money only to someone you know, not to someone you don't know. One common type of scam, known as the foreign lottery scam, involves fraudulent cashier's checks. The foreign lottery promises a prize if you wire money to the sender to cover the taxes and fees, which are a much lower amount than the prize being offered. The problem is the cashier's check you received in the mail from this fake lottery is fraudulent, and you can't get money back once it's wired. Secret shopper scams will also ask you to wire money after receiving a fake cashier's check to assess the wire transfer process. If you don't personally know the person, avoid wiring money.

2. Be cautious when receiving a cashier's check as a payment for an item that you're selling through a classified ad or online auction. A fraudulent cashier's check can look just like a real cashier's check. To avoid getting scammed, never accept a check for more than the asking price of the item you're selling. The buyer will ask you to wire the difference, and this is how you get scammed.

3. Insist that buyers of your merchandise pay with a credit card, cash or through an escrow or online payment service. Make sure you check out the service before using it to make sure it's legitimate.

4. Contact the financial institution that issued the cashier's check before taking any further action. A fraudulent cashier's check will have the name and contact information for a real financial institution, but that doesn't mean the check is real. Contact the local branch of the bank that issued the check, and make sure it's real before you deposit or wire any money. Don't trust the contact information on the cashier's check you received.

5. Ensure that the cashier's check clears. Never send any merchandise to a buyer or wire any money until the cashier's check clears. If the check is fraudulent, there will be no way for you to get back the merchandise or the money you wired.

Tips & Warnings

• If you believe you've received a fraudulent cashier's check, report it immediately to the Federal Trade Commission, the U.S. Postal Inspection Service or your state Attorney General.

References

• Federal Trade Commission: Giving the Bounce to Counterfeit Check Scams

Resources

• Federal Trade Commission
• U.S. Postal Inspection Service
• State Attorney General