From Fraud.org
- What is a fake check scam?
- What are the warning signs?
- What are the most common types of fake check scams?
- How do I know if it’s true that I’ve been selected for a cash grant?
- How can I tell if it’s a legitimate mystery shopper opportunity?
- How can I tell if a check or money order is counterfeit?
- How do the scammers find victims?
- If I can get the cash, doesn’t that mean the check or money order is good?
- Why can’t my credit union tell if the check or money order is good?
What is a fake check scam?
It’s a fast-growing fraud that could cost you thousands of dollars. There are many types of fake check scams, but it all starts when someone gives you a realistic-looking check or money order and asks you to send cash somewhere in return. It’s phony, and so is the person’s story, but that may take weeks to discover. Now your bank wants the money back. However, just because you can get the cash doesn’t mean the check or money order is good.
Ultimately, you are responsible for the checks or money orders you deposit or cash. That’s how the scam works.
What are the warning signs?
New variations of fake check scams constantly pop up, but in each case they give you a realistic-looking check or money order and ask you to send cash in return.
- Scammers befriend you and ask you to cash a check or money order as a favor.
- They want to buy something that you are selling and send a check or money order for more than you’re asking.
- They hire you to work at home and ask you to deposit checks or money orders in your account as part of your job. Sometimes they have you open a new account for the “business”, but you’re still responsible for any checks that you deposit.
- They send you a check or money order as an “advance” on the millions that you’re going to receive from a sweepstakes, lottery, or inheritance.
- They offer you a foreign business deal and send you a check or money order as an advance on your profits.
What are the most common types of fake check scams?
While there are some common fake check scams, new variations constantly pop up, so it’s important to learn the warning signs to avoid becoming a victim.
How do I know if it’s true that I’ve been selected for a cash grant?
- If you were notified that you’ve been chosen to receive a cash grant even though you never applied for it, it’s a scam.
- Grants are usually made to organizations and agencies, not to individuals.
- Grants require applications and are awarded for specific purposes.
- No legitimate grant giver would ever send a check or money order for part of the money and ask you for payment to get the rest.
- For information about real grants available from private and public sources go to foundationcenter.org and www.grants.gov
How can I tell if it’s a legitimate mystery shopper opportunity?
- Helping companies evaluate their customer service, store cleanliness, or other aspects of their businesses is a good way to earn extra cash, but claims that you can make lots of money as a mystery shopper aren’t true.
- If mystery shoppers are asked to make purchases, it’s usually for very small amounts for which they will be reimbursed.
- Mystery shoppers are paid after completing their assignments and returning the questionnaires to the companies that hired them. They don’t receive checks or money orders in advance nor are they ever asked to pay any fees.
- Payment may be reimbursement only – for instance, for a purchase at a fast food restaurant – or it may be a modest amount per assignment, generally $5 to $25.
- Businesses often arrange for mystery shoppers through independent companies, many of which are members of the Mystery Shopping Providers Association (MSPA). For more information go to mysteryshop.org.
How can I tell if a check or money order is counterfeit?
These phony checks and money orders are so realistic-looking that even credit union tellers are fooled. They may look like cashier’s checks, checks from business accounts, money orders, and travelers or gift checks. The companies whose names appear on them may be real, but the checks have been dummied up without their knowledge. Even if you call the credit union and learn that there is an account in the name of the person or company on a check, that doesn’t mean it’s valid. It’s also tricky to confirm that a money order or a cashier’s check is real, since the crook could have actually purchased one and made copies to distribute to victims. Here are some sources to help identify counterfeits.
US Postal Service Money Order Security
How do the scammers find victims?
- They scan newspapers and online advertisements looking for people who have listed items for sale or places to rent.
- They check postings from online job sites or place an ad soliciting contact information.
- They meet people through social networking sites, chatrooms, and other places on the ‘Net.
- They make phone calls and send faxes, emails or letters to people randomly, knowing that some will take the bait.
If I can get the cash, doesn’t that mean the check or money order is good?
- Federal law requires banks and credit unions to make the funds you deposit available quickly, usually within five days, depending on the type of check or money order. Just because you can withdraw the money doesn’t mean the check or money order is good. It can take weeks, even months, for counterfeits to be discovered.
Why can’t my credit union tell if the check or money order is good?
- When you deposit a check or money order, federal law requires you to have access to the funds within one to five days, but the actual processing takes longer.
- Your credit union accept checks and money orders based on your identification. They don’t have any information about the source.
- Because the check or money order goes back to the source, it can take a while for counterfeits to be discovered. For instance, if a check seems to come from a business account, the business may not learn about it until it appears on its next bank statement.
- You’re responsible because you’re in the best position to determine the risk of accepting the check or money order – you dealt with the person who gave it to you.
“Fraud.org is an important partner in the FTC’s fight to protect consumers from being victimized by fraud.” - FTC Commissioner Maureen K. Ohlhausen
