How to Avoid Fake Check Scams
Reading time: 5 Minutes
September 23rd, 2022
Fake check scams are one of the most common kinds of fraud in the United States. The Federal Trade Commission's Consumer Sentinel Network database shows that more than 27,000 fake check scams are reported annually, with reported losses adding up to more than $28 million dollars a year.
If you ever receive an unexpected check in the mail, get a call about winning a sweepstakes you never entered or are asked to buy gift cards as a secret shopper, take a moment before you act—you may be a target of a fake check scam.
How It Works
In a fake check scam, a stranger will typically reach out to you to say you've won money in some form: a job opportunity, a sweepstakes prize, or they might offer to buy something you're selling online. After receiving a check from the scammer, you'll be asked to send back a portion of the money.
While you may think you'll never fall for something like this, these scams work for a reason. The checks look genuine, even to seasoned bank employees. They may be printed with names and addresses of real financial institutions—sometimes, they may even be real checks written on actual bank accounts belonging to unfortunate identity theft victims.
Also, it can take several days, even weeks, for a check to be completely processed through the financial system. By law, banks are required to make deposited funds available quickly, usually within two days. But just because a check "clears" doesn't guarantee it's legit. If a check comes back as fake, you'll be responsible for paying the money back, and by this time the scammer will be long gone.
In other variations of this scam, you may not have to send back any money, but even the simple act of depositing the fake check can provide the scammer with your personal financial information.
The Most Common Types of Fake Check Scams
In a mystery shopping scam, you may receive a call from someone who wants to hire you as a mystery shopper. Your first assignment will be to evaluate a retailer that sells money orders, gift cards or some form of transfer service like Moneygram or Western Union.
Let's say it's gift cards. You'll receive a check to deposit into your account and then use to buy gift cards, which you will send to the scammer. As soon as they receive the cards, they will disappear before you—and the bank—realize the initial check was fake.
“Congratulations—you've won our sweepstakes!" In a sweepstake scam, you're given a check as part of a prize, but you'll also be asked to pay for fees or taxes out of the check amount.
Overpayment for online purchases
If you're selling an item online or own an online business, you may be targeted for an overpayment scam. A customer may “accidentally" send a check for more than the cost of what item or good they bought from you. They'll then ask you to refund the balance, which of course, is not what's actually happening—you'll be giving them free money.
In this scam, you've been hired online as a personal assistant. The scammer will send you a check to buy gift cards, new office equipment or expensive supplies. Once the scammers receive the gift cards or items, they will disappear. By the time the bank realizes your check is no good, you'll be left in the lurch.
Note: These examples are not the only ways that scammers can try to trick you. There are other variations, such as the grandparent scam or the debt collection scam, but in general, be skeptical of any requests from a stranger to send money in any form, or if a stranger sends you money out of the blue.
How To Spot A Fake Check Scam
By following a few guidelines, it can be easy to figure out fake check scams and avoid them.
Practice Stranger Danger
People you don't know shouldn't be sending you money without you expecting it. If you get an unexpected check from someone you don't know, play it safe.
Be Skeptical of Requests to Send Money
Be wary of using money from a check to send any form of money to someone you don't know. Whether it's gift cards, wire transfers or money orders, you're basically giving cash to a stranger and it may be difficult or impossible to get that amount back.
Never Pay For A Prize
If you legitimately win a prize, you won't need to pay anything to receive it. Genuine sweepstakes or contests don't require winners to fork over money for additional costs.
Watch out for Over Payments
If someone is trying to pay for more than what you're asking for, it's almost always a scam. Remember, if something seems too good to be true, it usually is.
Be Wary of Foreign Contact
Overseas lotteries or job offers are usually not the real deal.
What To Do If You Think You've Been Scammed
1. Report It
If you think you've been a target of a fake check scam, immediately report the incident to your bank.
If you paid a scammer with a gift card, contact the company that issued the gift card and ask if they can refund your money. Reach out to the store where you bought it from as well. For wire transfers, call the money transfer company immediately and see if they might be able to reverse the transfer. If you mailed a money order, contact the delivery service or the U.S. Postal Inspection Service at 877-876-2455. You should also report the incident to the Federal Trade Commission.
2. Keep Records
Take the time to write down notes of what happened—the more details, the better. Be sure to include a timeline, contact information and any kind of information that might help authorities track down the scammer and help get your money back.
3. Monitor Your Finances
Keep a close eye on your bank accounts for any unexpected activity. Checking your balances and recent transactions on a regular basis will help keep you from missing suspicious events.
By protecting yourself with knowledge, you can lower your chances of becoming a target to a fake check scam. Learn more about fraud protection and security guidelines online.
You're about to exit BOH.com
Links to other sites are provided as a service to you by Bank of Hawaii. These other sites are neither owned nor maintained by Bank of Hawaii. Bank of Hawaii shall not be responsible for the content and/or accuracy of any information contained in these other sites or for the personal or credit card information you provide to these sites.