did you get an unexpected check in the mail and thought, “great! free money?” not so fast. Cashing in that unexpected “windfall” can result in loss, revealing your personal financial information to scammers, or both.
according to the most recent data from the federal trade commission, fake check scam complaints remain in the “top 10 fraud categories” and increased during the first quarter of 2021. if the check appears to be finra, your broker or other legitimate business, think twice before trying to cash it out. these checks may arrive by special delivery and require the recipient’s signature, but don’t be fooled. that’s all part of the ploy to make the check look legitimate.
you have been hired… and scammed.
Fake check scams are often run in conjunction with job search scams. You’ll hear you’ve been “hired” and instructed to deposit a check into your bank account, then withdraw most of the money and wire it to someone else. victims are told to keep several hundred dollars of the money as payment. when the checks are later found to be fake, the banks reverse the deposit and the victims are responsible for the money withdrawn, usually several thousand dollars.
Even if you’re not asked to re-send some of the funds, unexpected checks can still be scams. for example, you could be responsible for the amount of the forged check, your endorsement could provide your account information to fraudsters, or you could receive phishing tracking attempts to obtain personal financial information, or some combination.
how can I protect myself?
To avoid fake check scams, follow these tips:
- don’t cash the “out of the blue” check. Companies, including Finra, rarely send checks that don’t include some explanation of why the check was written. Unless you’re expecting the check, and you’re absolutely sure it’s for you, don’t cash it.
- Don’t “keep the change.”No legitimate company will overpay you and ask you to transfer the difference to the company or a third party. Be very wary of any offer, in any context, to accept a check or money order for more than what is owed to you.
- verify the sender’s communication methods. Legitimate businesses rarely communicate exclusively through social media or messaging apps, and hiring managers and executives at those businesses typically don’t use personal email accounts (eg, Gmail or Hotmail) for business purposes.
- Call the company directly to verify the check. Remember that some counterfeit checks will have a legitimate company’s real account number with the correct routing number. Call the company directly to verify the check, using a phone number you obtain on your own from the company’s directory assistance. do not use any phone number that appears on the check or in any instructions you receive. for finra checks, call (301) 590-6500.
- Know the characteristics of fraud. Fake check scams often have a number of red flags, including:
- typos – Beware of online postings, text messages, or emails that are riddled with typos and bad grammar. .
- Mismatching Names: Compare the name of the person or company posting the opportunity with the name on the check you receive, and be careful if they don’t match.
- Pressure to act quickly: Keep in mind that it can take 10 days or more for your bank to determine that a check is fake. until you have verified with your bank that the check has cleared; do not wire funds.
where to go for help
If you have been the victim of a fake check scam, there are certain steps you should take immediately.
- stop further losses. start by blocking or closing accounts that may have been compromised. place a fraud alert and consider a credit freeze. visit com or call (877) 322-8228 to request your free credit report from each of the credit reporting agencies. change your passwords if applicable.
- keep records. take and keep notes: Details can be important if recovery is an option. and contact the local police. they may not be able to investigate, but having a report can help with future claims.
- File reports. You’ll want to alert the proper authorities that you’ve been scammed. start with:
- the internal revenue service (irs) identity protection unit (800) 908-4490
- the internet crime reporting center (a partnership between the fbi and the national white collar crime center)
- united states postal inspection service (if the check came by us mail)
Sign up for finra’s investor information newsletter to learn more about saving and investing.