Experts
estimate that billions of dollars have been lost as the result of fake check
scams. Scams involving fake checks come in many different forms and can be very
hard to identify as the printing technology used by scammers improves. Better Business
Bureau warns against three common check scams and offers advice on the red
flags to look out for.
According
to a recent survey by the Consumer Federation of America, nearly one-third of
adults have been approached by a scammer trying to pass off fake checks and at
least 1.3 million people have become victim of the scam with an average loss of
$3,000 to $4,000.
“It
can be practically impossible to tell a fake check from a real one using only
the naked eye because fake checks can be printed in full color and even include
watermarks,” said Frank Whitney CEO of the MidCal BBB. “Many check scams
plaguing consumers in the US
are the work of scammers operating outside of the country and originate in Canada, Jamaica
and Africa which makes it extremely difficult
for law enforcement to track them down and bring them to justice.”
Scams
involving fake checks typically require the victim to deposit a check into
their bank account then wire money back to the scammers. While the check may
initially be deposited into the victim’s bank account—leading to a false sense
of security—the fake check will ultimately be discovered within a couple weeks
and the bank will take the funds out of the account. The victim of the scam is out whatever money
they sent to the scammers and will be responsible for paying the bank back if
their account is overdrawn.
Following
are three common scams that rely on fake checks and can cost victims tens of
thousands of dollars:
Lottery and
Government Grant Scam
Victims
receive a letter claiming they’ve won a lottery or qualify for a financial
assistance grant. Included with the
letter is a check for at least a partial amount of the total money they have
coming to them. The victim is told that, in order to receive the rest of the
money, they are to deposit the check and wire back as much as several thousand
dollars. The victim is often told this is to cover taxes or administrative
fees. In June, a Nebraska woman lost $58,000 after being told
she’d won $11 million in the Jamaica Lottery.
Mystery Shopping
Scam
The
victim believes that they are going to earn a few hundred dollars by working
for a company that provides mystery—or secret—shopping evaluations for
businesses. The victim receives a letter in the mail along with evaluation
forms, a check and detailed instructions. The victim is to deposit the check
into their bank account, and then use the money to purchase items from
specified stores and evaluate the customer service the rest of the money is
theirs to keep for the work they did. Included in the list of stores to
evaluate is Western Union or MoneyGram and the
victim is told to wire as much as a couple thousand dollars back to their
“employer” and rate their experience with the money wiring service.
Overpayment Scam
The
victim is selling an item through a newspaper classified or an online site such
as Craigslist. A buyer shows interest
and asks to pay for the item by check. When the check arrives the amount is
higher than the price of the item. The victim is told that it was a mistake and
is sometimes asked to wire the extra back or that the extra cost is for the
victim to wire payment to a shipping company that the scammer has chosen—of
course the supposed shipping company is actually the scammers.
Fake
check scams aren’t limited to the schemes already mentioned and BBB offers the
following red flags to look out for:
- You’re told
you won a lottery or received a grant you didn’t apply for.
- The name on
the check does not match the name of the company or individual you’re
supposedly dealing with.
- You’re given
instructions to deposit a check into your account and promptly wire part
of those funds back to the sender or to another specified company or contact.
- Don’t be
fooled by a phone call. Just because you’ve spoken to the scammer over the
phone, it doesn’t mean they’re not trying to rip you off.
For
more advice you can trust from your BBB on avoiding common scams, visit
www.bbb.org