Fake Check Scams On The Rise

In early September, the Better Business Bureau (BBB) released a report warning about aWoman writing a check spike in fake check scams across the country. While these scams are not new, their occurrence rate has doubled over the last three years and is up 12% from 2017.

The BBB further announced that billions of dollars in fake checks circulate each year, and that the number of victims this scam snares annually is close to 500,000.

The amount of money lost from these scams is just as staggering: The FTC reported losses of approximately $40 million from fake check scams in just one year.

Perhaps the most alarming aspect of this scam is the fact that the largest pool of its victims falls between the ages of 20 and 29 – a segment of the population that is far more familiar with electronic payment methods, like PayPal and Venmo, than with the archaic paper check. This makes them easy victims for the scam.

Aside from ordinary paper checks, this scam can also be pulled off with cashier’s checks and money orders. Regardless of the medium, each of these scams involves a scammer “overpaying” a victim and requesting the check be cashed with the difference being deposited into a designated account belonging to the scammer.

Steve Baker, an investigator with the BBB, cautions: “What they all have in common is that the check is counterfeit, and just because the money is credited to your account does not mean the check is good.”

Here are the most common variations of the fake check scam:

  1. “Buyers” send sellers a check written out for more than the asking price of an object sold on an online marketplace, such as Craigslist.
  2. Lottery “winners” are rewarded with an inflated prize and given instructions to pay back a part of the check to cover taxes or fees.
  3. “Employees” are granted checks for supplies, with instructions to wire back a part of it to the “company.”

In each case, the fake check or money order seems to clear in the bank or credit union. It is only a few days later, when the victim’s payout to the scammer is deposited and the account does not have sufficient funds to cover it, that the scam becomes clear.

The BBB warns that this scam can be hard to spot, especially for millennials who may not be familiar with paper checks. To that end, learning what to look for to determine a check’s authenticity is the public’s best weapon against this scam.

Wondering if a check is a fake? Hold it up to this checklist:

  • Is the check’s paper stock weak and flimsy?
  • Check the company’s name and address. Are they spelled correctly?
  • Every check will have an identification number printed toward its top and again at the bottom. Verify that these numbers match up.
  • If you’re allegedly holding a lottery-winning check in your hands, the check should be written out from a state lottery commission. If it’s made out by a random company, it’s bogus.
  • Look for the special ink required for the Magnetic Ink Character Recognition (MICR) code that’s at the bottom of the check.
  • The check should have a routing number from its bank. You can Google the bank to find out if the routing number is genuine.

Aside from knowing how to recognize a fake check, it’s important to know which kinds of transactions are likely to be scams. If you come across any of the following, run the other way and don’t look back:

  • You’re asked to wire money to a company you’re not familiar with.
  • You’re given a check by a “buyer” that is made out for more than the item’s sale price.
  • You’re given a check from a foreign bank you’ve never heard of.
  • You’re asked to pay a fee to claim a “prize.”

Now that you know how to spot a fake check and which kind of transactions to avoid at all cost, those scammers don’t stand a chance!

Your Turn: Have you ever been targeted by a fake check scam? Share your story with us in the comments!

SOURCES:
http://www.semissourian.com/story/2549480.html

https://www.news-leader.com/story/news/local/ozarks/2018/09/05/better-business-bureau-releases-report-fake-check-scams/1202964002/
https://www.google.com/amp/s/www.cbsnews.com/amp/news/fake-check-scams-an-exploding-epidemic-new-report-says-better-business-bureau/

Brought to you by Destinations Credit Union.

Beware Of Fake Checks! Protect Yourself From The Latest Scam

Despite a rapidly changing economy and a constantly evolving banking system, personal checks don’t look all that iStock_000000199568XSmall checkdifferent from the way they looked 50 years ago. They represent a system of trust and goodwill. Recently, though, they’ve been used as the means for pulling off some nasty scams.

The National Credit Union Administration (NCUA) has recently cautioned consumers to be extra wary of an uptick in the circulation of fake check scams. The Federal Trade Commission (FTC) also recently issued an alert regarding a fake check scam.

There are several variations of the fake check scam, but they all end with the victim losing thousands of dollars.

The scam may be done under the pretext of a work-at-home job, an online sale or a sweepstakes that you’ve miraculously “won.” You’ll be asked to deposit a check or money order worth several thousands of dollars more than the amount you’re supposedly owed and then wire the difference to your contact. They’ll always have a story to explain why that process is necessary – such as they’re avoiding complicated overseas tax laws, an error on their part or they need you to cover fees. If they’ve “employed” you, they may claim that these checks are from their “clients” and need to be processed after you’ve deducted your portion.

Of course, these checks are completely phony. Unfortunately, it can take several weeks for a financial institution to recognize a fake check. By that time, you may have already sent the requested amount to the scammer, and by the time you realize the check was fraudulent, it’s too late to reclaim your money. Worse yet, you’ll be responsible to pay the fee for the bounced check. If you didn’t have sufficient funds to pay the amount you sent to the scammers and you were relying on their check to cover the amount, you’ll also need to reimburse the financial institution for that money.

If you think you’re too smart to fall for this scam, think again. Fake checks can be extremely hard to recognize, as they often bear the name and logo of legitimate financial institutions. In fact, the Council of Better Business Bureaus recently released list of the most risky scams, fake check scams rated number two.

Keep yourself safe by following these tips:

1.) Wait for clearance
It’s hard to tell if an online job is bogus until your first paycheck clears. Wait several weeks until you can verify that the funds from a deposited check are completely available before making any wire transfers with that money. Never use the funds from a deposited check from an unknown source until you are absolutely certain it has cleared.

2.) Ask questions
If an online sale or job sounds suspicious, don’t be afraid to be curious. Ask about the over-payment and the inflated checks. When you’re told a long, rambling tale about overseas charges and company errors, ask more questions. Demand a new check and some sound answers. If you don’t receive what you ask for, rip up the check and shut down any communication you might have had with them.

3.) Play hard to get
Scammers find your information by buying lists of potential victims from other scammers, randomly calling thousands of numbers and reviewing your online activity to see if you’re a good target. They’ll check if you click on enticing but unbelievable offers, and determine whether you’re looking for a job. They’ll check whether you open every email you receive and answer every phone call.

Stay one step ahead of their game by being as anonymous as possible. Make sure your number is on the FTC’s Do Not Call List. You can add your number to the list at donotcall.gov. Strengthen your spam filter and never answer emails that sound too incredible to be true. Be wary of answering calls from unknown numbers – just picking up the phone makes you a credible target.

Lastly, if you or someone you know has been victimized by a fake check scam, be sure to report the scam to your local law enforcement agency and to contact your state’s attorney general. It’s also important to file a complaint with the FTC, where it will be filed in a secure online database used to help international law enforcement agencies track down the criminals responsible for these reprehensible scams.

Remember: the best protection against scams is to be informed and to be aware. Always be on the alert for those low-down scammers who are trying to take advantage of your trust and goodwill.

Stay in the know, and stay safe!

Your Turn: Have you ever been targeted by a fake check scam or connected events to scam attempts ? Share your experience with us in the comments!

SOURCES:
https://www.ncua.gov/newsroom/Pages/news-2017-april-check-scams.aspx
https://www.consumer.ftc.gov/blog/dont-bank-check

http://www.fraud.org/fake_check_scams