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Check Scams

Check Scams

It may be one of the oldest tricks in the book, but it still works because scammers are becoming more sophisticated all the time. Learn more about how these scams work and how to protect yourself against them.

In any variation of a check scam, the result is the same:

  1. You receive a check. In the most recent type of scam, a fraudster will ask for your online banking information so they can do a mobile check deposit. In some scams, you’ve won the lottery and are asked to cash the check and wire a portion back to the sender to cover handling fees or taxes. In some scams, a “buyer” offers to purchase an item you have for sale on the internet or classified ads; the check they send is more than the agreed price, and they ask that you wire the difference back and may even suggest that you keep some extra “for your troubles”. In another kind of scam, you are asked to evaluate the effectiveness of a money transfer service by cashing a check and then transferring some of it to another individual.
  2. The check gets deposited into your account. Many times, the check won’t be caught as fraudulent right away, so you’ll be allowed to deposit the check. While tellers do get trained to watch for these scams, these checks often look like a legitimate cashier’s check. (This is why we ask questions about where you got checks that we aren’t familiar with.) Just because your bank or credit union accepted it doesn’t mean the check is legitimate.  
  3. You send the scammer some of the funds. By federal law, banks are required to make funds available to you from certain types of checks (i.e. cashier’s checks, certified checks) within the business day, so you’ll be able to use the money right away to send what the fraudster is asking for. 
  4. The check is returned as counterfeit. The problem occurs when the bank receives notice that the check is counterfeit and you have already wired the money. You will be out the funds that you sent to the fraudster plus any of the funds that you used from the counterfeit check. The bank or credit union will require you to pay back all of the funds.

HOW TO PROTECT YOURSELF

  • If you are asked to cash a check, to wire money or send a money order to an unknown person for whatever reason, ASSUME THAT IT IS A SCAM.
  • If you deposit a check from an unknown person or organization, do not use any funds until the check has actually cleared the bank and the bank says the funds are available. Scam artists will try to pressure you to act immediately. Do not respond.
  • Remember any check you deposit into an account is your responsibility. If it comes back unpaid, you will be required to pay the funds to the institution. Even if the institution does not place the funds on hold, the check can come back unpaid.
  • Do not accept checks for merchandise, if possible. Require cash.
  • Never disclose credit card, bank or personal information to someone you do not know or are unsure of.
  • Legitimate lotteries do not select winners at random. You have to participate in a lottery to win.
  • Legitimate lotteries will not require you to pay to collect winnings.
  • If you purchase one foreign lottery ticket, expect many more bogus lottery or investment “opportunities”, because you will be placed on what is called a “sucker list”, that fraudulent telemarketers buy and sell.
  • Don’t accept a check for more than the price that you agreed upon.
  • Consider using an escrow service or online payment service (make certain that you have checked the service out before hand)
  • Ask for checks from local banks. If this is not possible, call the bank the check is drawn on to ask if it is valid.

HOW WE PROTECT YOU

All employees receive extensive, ongoing training on what to look for in a fraudulent check and what current scams to be aware of. Many times a credit union employee will recognize the check as possible fraud and can call the issuing bank to verify whether or not the check is legitimate. The more information you offer to your teller about where you got the check, the more likely it is that we can help you avoid a scam.

More information about check scams can be found at FakeChecks.org, Federal Trade Commission, or Internet Crime Center.

If you ever have a question about possible fraud or this may be happening to you, please feel free to contact Great Basin Federal Credit Union at fraud@greatbasin.org.

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