Fraudulent Checks

Someone sends or gives you a check and asks you to deposit it in your bank and then wire back a portion of the amount, leaving you with a net profit.  This can happen in many ways and will sound like a good deal.  But the check will be counterfeit.  It will be returned to your bank and the full amount deducted from your account.  You can avoid this problem by not cashing the check in the first place, but if you do you should wait until it clears before withdrawing any of it.

In one example of this scam letters are sent to people asking them to participate in a mystery shopping program to help evaluate a certain business in their area. A counterfeit check that appears to come from a government agency is enclosed along with instructions to deposit it in your bank, spend some at the business and provide a written appraisal of your shopping experience, keep a portion for your work, and wire the balance elsewhere, typically overseas. There are legitimate companies that hire mystery shopping but they usually pay $8 to $20 per shop after the assignment is completed, and don’t require any wire transfers.

In January 2007 The Office of the Comptroller of the Currency (OCC) sent out bulletin OCC 2007-2 to all national banks warning them of an increasing number of complaints relating to fraudulent cashier’s checks and advising both depositary and paying banks of actions to take to address risks to them.  These fraudulent checks have often been received by bank customers who sell goods or services over the Internet.  And in some cases they are asked to wire other funds to third parties.  In all these case the customer believes the cashier’s check to be valid and deposits it in his or her account.  When the bank makes the funds “available” the customer sends the goods or funds.  Later the check is returned unpaid because it is discovered to be fraudulent.  To avoid losses from this check scam bank customers should wait until the check clears before sending goods or funds.     

The IC3 recommends taking the following steps to determine whether a check is counterfeit:

  • Ensure that the amount of the check matches in figures and words.
  • Inspect the check to see that the account number is not shiny in appearance, the drawer’s signature looks natural, i.e., not traced, and the check is perforated on at least one side.
  • Inspect the check for additions, deletions, or other alterations.
  • Contact the financial institution on which the check is drawn to ensure its legitimacy.  Obtain the phone number from an independent, reliable source, not from the check itself.
  • Be cautious in dealing with foreigners.