Fake checks continue to be one of the most common instruments used to commit fraud against consumers. Before you deposit a check you weren’t expecting or wire funds to an unknown recipient, here is what you should know: Show How do Fake Check Scams Work?There are many variations of the scam. It usually starts with someone offering to:
Fraudsters issue you a check or money order worth more than the amount owed to you and instruct you to wire the excess funds back to them before receiving your lump sum payment. After you’ve sent the money, you find out that the check or money order is bogus. Tips to prevent fake check scams:
©2022 American Bankers Association. Reprinted from www.aba.com with Permission. All Rights Reserved. Ways to Avoid Fake-Check Scams We may live in a world of contactless credit cards and
mobile payment apps, but old-fashioned paper checks are far from extinct. Checks still
accounted for 6.5 percent of noncash payments in the United States in 2020 and for nearly 23 percent of the money that changed hands in those transactions, according to the most recent
Federal Reserve data. That
continuing reliance on paper creates an opportunity for scammers to try to steal your money through a variety of fake check scams. The approaches differ, but these cons have the same basic kicker: The crooks want to get you to deposit a counterfeit check in your bank account, then return a portion of the supposed funds to them. One common ruse is the overpayment scam. You put something up for sale in a newspaper classified ad or online post. Someone makes an offer and sends you a check — perhaps even a cashier’s check, which seems extra-safe. The check turns out to be for considerably more than what you charged for the item. The “buyer” will pretend it’s a mistake and ask you to deposit the check and refund them the difference. That’s a scam. Crooks exploit the fact that banks must make funds from a check deposit available to the account holder within days but can take far longer to discover that the check is phony — sometime weeks, according to the Federal Trade
Commission (FTC). When the check does bounce, you’re out whatever you sent the scammer, plus any other funds from the fake check that you’ve withdrawn or used. Banks do not assume those losses. Con artists run numerous variations on this scheme.
In each case, the check bounces and you’re out what you’ve paid. And that can be quite a bit: The Better Business Bureau reported a median loss of $1,475 from complaints of fake check or money order scams it logged in 2021, making them the second-costliest con among those the organization tracks. These scams remain popular with fraudsters because they’re easy to pull off. With the help of a scanner and a good printer, a crook can fabricate a bogus check — even a bank draft, certified check or cashier’s check — that’s hard to distinguish from the real thing (see "6 Ways to Spot a Fake Check," below). Some phony checks even contain authentic-looking watermarks, according to the FTC. 6 Ways to Spot a Fake CheckWith advances in scanning and printing, scammers can produce counterfeit checks that get alarmingly close to the real thing. But there are still several physical clues that can help you discern when you’ve been passed some bad paper. If you’re unsure of a check’s provenance, follow these tips from EPCOR, a nonprofit association that works to improve payment systems for more than 2,000 member banks, credit unions and other financial institutions in 12 states. 1. Feel the edges
Legitimate checks will usually have at least one rough or perforated edge. One sure-fire way of spotting a fake is to examine its edges. If all four sides are smooth, it was likely not issued by a financial institution. Flowers & Gifts Proflowers 25% off
sitewide and 30% off select items See more Flowers & Gifts offers > 2. Look at the logo A hallmark of any legitimate check is the logo of the bank where the account is held. If there’s no logo, it’s probably not a real check. If there is a logo but it’s faint or faded, that’s a sign that it’s been copied from another source. 3. Verify the bank address Even if the logo looks legit, check the website of the named bank, or call its customer-service number, to make sure the address written on the check is correct. If the address is absent or includes a P.O. Box, don’t cash the check. 4. Check the check number Every legitimate check contains a number that appears in two places: in the upper-right corner and in the magnetic ink character recognition (MICR) line at the bottom. If the numbers don’t match, it’s a bogus check. And be wary of low numbers, such as 101-400 on a personal check or 1,000-1,500 on a business check. This signals a new account, and 90 percent of fake checks are written from new accounts, EPCOR warns. 5. Rub the MICR line Rub your finger over the line at the bottom of the check and look closely at its quality. The special ink used for the MICR line prints out smoothly. Any indication of raised or shiny numbering means the check is fake. 6. Examine the paper Authentic checks are printed on thick, coated paper stock with a matte finish. If a check feels thin and flimsy when you bend it, or looks shiny, it’s probably phony. Another test is to run a damp finger across inked areas on the
paper. If the ink smears, the check is fraudulent. Can a fake check be cashed?Once the check is returned unpaid, the check will bounce — meaning it can't be cashed — even if you didn't know that the check was bad. And you'll likely be responsible for repaying the bank the amount of the faked check.
Can a fake check be deposited online?Often, mobile deposit fraud tactics involve capturing account login information for trial deposits or “better odds” if the information is provided. Remote Deposit Scams: This involves the scammer gaining access to a victim's bank account and depositing fraudulent checks.
What happens if you cash a fake cashier's check?If you deposit a cashier's check that turns out to be counterfeit, your bank will reverse the deposit from your account. If you have already spent some or all of the money, you are responsible for paying it back to the bank. Your only recourse would be against the person who wrote the check-in the first place.
How can I verify a check online for free?Unfortunately, there is no simple, free tool for consumers to verify checks online. You need to contact the particular bank that the funds are drawn on (or the check issuer), and the bank needs to be willing to accommodate your request.
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