Who writes checks anymore? Apparently, plenty of scammers — so watch out.
Consumer watchdogs and banking experts are seeing widespread growth in check fraud. And they are flat out suggesting "Don't cash that check."
Scammers, of course, know that we're all looking for a way to make some extra cash — maybe by selling off some old furniture, maybe by taking a job as a mystery shopper, maybe by wrapping the car in an ad, or even maybe by convincing ourselves that we actually won a prize.
The problem: The fraudsters are taking advantage of the banking system by masterminding ways to hand over fake checks that may seem pretty real. So real that you're likely to send back some of the money when asked. Seriously.
The solution: Don’t cash or deposit any checks, cashier’s checks or money orders from strangers who ask you to wire any of that money back or put some money on a gift card.
If that check or money order ends up being counterfeit, you're on the hook.
Think you'd never fall for this one? According to the Federal Trade Commission's Consumer Sentinel data, consumers reporting fake check scams in 2017 indicated they lost a total of about $25 million. The FTC received 24,437 such complaints last year.
Younger consumers may be particularly vulnerable because of the access to mobile banking technology, according to Melanie Duquesnel, president and CEO of the Better Business Bureau Serving Eastern Michigan.
"Just a snap or two of the check and it’s in your account, right?" she said.
But the bank can reverse the deposit many weeks from now when the bank determines there was not sufficient funds in that account.
"The money the victim sent back to the scam artist is now long gone and must be paid back to the bank," she said.
Many times, of course, bank tellers on the front lines make efforts to spot fake check fraud and warn potential victims. They look for some common signs, such as a questionable check for an amount in the range of $1,200 to $2,000. Routing numbers could be off. Or the check stock could look flimsy. Maybe the check looks out of place simply because the customer typically never deals with deposits like this.
Once that check is deposited, it can become quite confusing for consumers.
Federal banking rules require that when someone deposits a check into an account, the bank must make the money available right away — often within a day or two, although there are some exceptions, according to an extensive study released by the Better Business Bureau.
Worse yet, cashier's checks and postal money orders are treated as guaranteed funds and the bank must credit the account within 24 hours if the check is for less than $5,000.
No surprise, the crooks know the rules and play right around them.
Scam-related check fraud has been dubbed an "exploding epidemic" in the report by the BBB.
What are some signs of the fake check scam?
Before you even head to a bank, ask yourself why you're getting all this money.
Scammers use these counterfeit checks in many of the same types of scenarios.
So, is this check connected with a sweepstakes? A job offer to be a "mystery shopper" at some store?
Or you just got an amazing offer for putting a decorative wrapper around your car?
One college student in Oakland, California, received an email offering to pay her $250 a week to drive her car around wrapped in an advertisement for Mountain Dew. As part of that deal, she received a check in the mail for $4,850, according to the BBB report.
The real problems started, of course, after she deposited that check.
Seeing that the check appeared to clear, she was able to withdraw $3,500 the next day to later deposit into the bank account of a so-called "car specialist."
She didn't suspect any trouble until she was later told to take another $500 and put it on an iTunes gift card. She questioned that move and didn't put the $500 on the gift card.
But she still lost $3,500 in this scam when the check proved to be a fraud and she had already deposited money in another account, according to the BBB report.
Another student in Kansas nearly lost money on a deal that supposedly would have paid him money for having his car wrapped with a beer brand logo. His saving grace was that he realized many scams involve sending someone money by Western Union so he refused to take that step.
"These types of scams work because people simply need the money," Duquesnel said.
"While we may be okay financially, we can always use more in our bank accounts. Folks don’t always think about what could go wrong."
How does the fake check scam work?
A common thread of fake check scams is that someone is going to ask you to send money — or put money on a gift card — somewhere along the line.
The scam will hinge on you depositing a fake check in the bank and then for some reason giving money to the scammer.
If you advertise something on Craigslist, say furniture or a car, someone might offer to pay far more than the selling price for some reason.
If you somehow "won" a sweepstakes, you might be sent an "advance" that will require that you pay back some of that money for taxes or fees upfront.
In July, for example, a Nigerian national was sentenced to 15 months in prison at U.S. District Court in Louisville, Kentucky, for his role in a sweepstakes scheme that scammed more than 50 people nationwide.
Victims received a letter stating that they had won a lottery or a sweepstakes. The letter included a check for several thousand dollars to cover "insurance and legal fees."
The "winner" was to deposit the check and then send cash to an address in Louisville. And plenty of people sent money. Nearly $258,000 was ordered in restitution to victims.
Small business owners and lawyers also are targeted by scammers pretending to offer new opportunities. One such recent email suggested that someone could be paid to be an “Intermediary” or "Regional Representative Agent" to help a foreign company do business in the United States and Canada.
Again, you have to ask yourself, really, why is this deal being offered out of the blue to me? And why is this check so large?
You cannot outsmart the fraudsters. The bank ultimately will determine that the check is a fake and you will need to hand over any cash that you've withdrawn to the bank.
Maybe a teller will warn you that you're about to be a victim of a scam. But maybe you won't get such a warning or you'll ignore it.
Remember, even if the funds appear to be available initially, it's not a guarantee that the check is any good. A so-called cleared check could prove to be a phony — and you'll be on the hook.
Contact Susan Tompor: stompor@freepress.com or 313-222-8876. Follow Susan on Twitter @Tompor.
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