FDIC Consumer News: Beware of Fake Checks

fdic consumer news: august 2019

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August 2019 – pdf

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August 2019 – pdf

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Protect yourself from fake check scams with these tips from FDIC Consumer News

Even in today’s digital and mobile world, where electronic money transfers are commonplace, consumers and businesses may still prefer the supposed security of paper cashier’s checks or official bank checks for large or important payments. recipients generally prefer one of these checks to a personal check because the financial institution has presumably already cashed the funds from the party purchasing the cashier’s checks or official bank checks. this means that the payment is guaranteed, unless the check is fake, so there are also risks for consumers and businesses due to these types of paper instruments.

Unfortunately, criminals have come to rely on their victims’ sense of “security” provided by official cashier’s checks and bank checks. Advanced graphics and printing technologies allow scammers to easily create fraudulent and hard-to-detect counterfeit checks in a matter of minutes, adding a sense of legitimacy to their scams. Fake checks can look so real that it’s very hard for consumers, or even bank employees, to spot.

Fake bank checks are often used in scams where the scammer tries to get you to cash or deposit the check. once it is deposited, they ask you to pay all or part of the proceeds back to them or someone else (an accessory) before the bank where it was deposited attempts to clear or process the check for payment and realizes that the instrument is fake. The scammer may ask you to pay the funds back in several ways: in cash, by writing a personal check, by loading it on a prepaid or gift card, or through some electronic means, such as wire transfer, automatic clearing house payment (ACH), or a person-to-person (p2p) transaction.

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If the check is later determined to be bogus, you will likely be responsible for the funds provided to the scammer, so it’s important to recognize the signs of a bogus check to protect yourself. Remember, scammers are constantly finding new ways to use fraudulent official bank or cashier’s checks in their scams. Here are three of the most common scams and tips on how to spot whether or not you’re being scammed.

  1. lotteries and sudden wealth scams

    In these examples, recipients of the check are told that they have won a lottery, perhaps in a foreign country, or that they are entitled to receive an inheritance. the recipient is instructed that in order to “claim” their lottery winnings or inheritance from them, they must first pay “taxes and fees” before they can receive their prize or money. a bogus cashier’s check is sent, which the scammer asks the recipient to cash and then wires the funds to cover taxes and fees.

    online auctions, classifieds sites and overpayment scams

    Scammers may go to an online auction or classifieds site and offer to buy an item for sale, pay for a service up front, or rent an apartment. The weird thing is that they may send you a cashier’s check for more than the selling price. when you report this to them, they will apologize for the oversight and ask you to promptly repay the additional funds. The scammer’s motive is to get you to cash or deposit the check and send the legitimate money before you realize the check you deposited is fake.

    Mystery Shopper Job Scams

    In these cases, the scammer advertises a job opportunity and claims to be “hiring” people to work from home. the “employee” may receive an official check as an initial bonus and is asked to cover the cost of “account activation”. the scammer hopes to receive these funds before the official check is paid and the new hire realizes they have been scammed.

    Another scenario involves an offer to work from home as a secret shopper to “assess the quality” of local money transfer companies. the “employee” is sent a cashier’s check and is instructed to deposit it into his bank account and withdraw the amount in cash. they are then instructed to use a local money transfer company to send the funds to the “employer” and to “evaluate” the service provided by the money transfer company.

    how to spot a fake check

    • make sure the check was drawn on a legitimate bank. while some fake checks will include the name of a legitimate bank, a fake name is a safe giveaway. fdic bankfind allows you to locate fdic-insured banking institutions in the united states.
    • check with the bank that supposedly wrote the check to make sure it’s real. Be sure to look up the phone number on the bank’s official website and don’t use the phone number printed on the check (which could be a phone number monitored and answered by the scammer). then call the official number and ask them to verify the check. they will probably need to know the check number, the date it was issued, and the amount.
    • Consider how and why you received the check. If someone you don’t know initiated the payment, be skeptical and proceed with caution. scammers often communicate with their victims via email or text message. your communications may contain bad grammar and spelling errors.
    • look where the check was sent from; if the postmark is not the same as the city and state of the “alleged” issuing bank, it could be an indication the check is fake. be especially careful if it was mailed from abroad.
    • determine if the amount of the check is correct and expected. bogus checks are often written for more than the agreed amount. this is intended to persuade the person receiving the check to transfer the overpayment to the scammer.
    • official checks often contain watermarks, security threads, color-changing ink, and other security features . while scammers can sometimes copy these security features, the quality is often poorly executed.

    what to do if you are scammed

    If you think you’ve been the target of a counterfeit check scam, report it immediately to any of the following agencies:

    • the us Postal Inspection Service at www.uspis.gov (if you received your check in the mail).
    • State or local consumer protection agencies. visit naag (www.naag.org) for a list of state attorneys general.
    • for possible online crimes related to counterfeit checks and money orders, file a complaint online with the reporting center Internet Crime (www.ic3.gov) (a joint project of the FBI and the National Center for White Collar Crime).

    In addition to notifying the bank named on the check, you can notify the website or online service where you encountered the scammer (for example, online auction website or job posting website ), so that they can prevent you from using their services in the future.

    For more help or information, visit fdic.gov or call fdic toll-free at 1-877-ask-fdic (1-877-275-3342). Send your story ideas or comments to consumernews@fdic.gov

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