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Tips for Recognizing and Avoiding
Fake Check Scams
If someone you don't know wants to pay you by check but wants you
to wire some of the money back, beware! It's a scam that could cost
you thousands of dollars.
- There are many variations of the fake check scam.
It could start with someone offering to buy something you advertised,
pay you to do work at home, give you an "advance" on
a sweepstakes you've supposedly won, or pay the first installment
on the millions that you'll receive for agreeing to have money
in a foreign country transferred to your bank account for safekeeping.
Whatever the pitch, the person may sound quite believable.
- Fake check scammers hunt for victims. They scan
newspaper and online advertisements for people listing items for
sale, and check postings on online job sites from people seeking
employment. They place their own ads with phone numbers or email
addresses for people to contact them. And they call or send emails
or faxes to people randomly, knowing that some will take the bait.
- They often claim to be in another country. The
scammers say it's too difficult and complicated to send you the
money directly from their country, so they'll arrange for someone
in the U.S. to send you a check.
- They tell you to wire money to them after you've
deposited the check. If you're selling something, they say they'll
pay you by having someone in the U.S. who owes them money send
you a check. It will be for more than the sale price; you deposit
the check, keep what you're owed, and wire the rest to them. If
it's part of a work-at-home scheme, they may claim that you'll
be processing checks from their "clients." You deposit
the checks and then wire them the money minus your "pay."
Or they may send you a check for more than your pay "by mistake"
and ask you to wire them the excess. In the sweepstakes and foreign
money offer variations of the scam, they tell you to wire them
money for taxes, customs, bonding, processing, legal fees, or
other expenses that must be paid before you can get the rest of
the money.
- The checks are fake but they look real. In fact,
they look so real that even bank tellers may be fooled. Some are
phony cashiers checks, others look like they're from legitimate
business accounts. The companies whose names appear may be real,
but someone has dummied up the checks without their knowledge.
- You don't have to wait long to use the money, but
that doesn't mean the check is good. Under federal law, banks
have to make the funds you deposit available quickly - usually
within one to five days, depending on the type of check. But just
because you can withdraw the money doesn't mean the check is good,
even if it's a cashier's check. It can take weeks for the forgery
to be discovered and the check to bounce.
- You are responsible for the checks you deposit.
That's because you're in the best position to determine the risk
- you're the one dealing directly with the person who is arranging
for the check to be sent to you. When a check bounces, the bank
deducts the amount that was originally credited to your account.
If there isn't enough to cover it, the bank may be able to take
money from other accounts you have at that institution, or sue
you to recover the funds. In some cases, law enforcement authorities
could bring charges against the victims because it may look like
they were involved in the scam and knew the check was counterfeit.
- There is no legitimate reason for someone who is
giving you money to ask you to wire money back. If a stranger
wants to pay you for something, insist on a cashiers check for
the exact amount, preferably from a local bank or a bank that
has a branch in your area.
- Don't deposit it - report it! Report fake check
scams to the National Fraud Information Center/Internet Fraud
Watch, a service of the nonprofit National Consumers League, at
www.fraud.org
or (800) 876-7060. That information will be transmitted to the
appropriate law enforcement agencies.
Check out NCL's new brochure.
If you need advice about an Internet or telemarketing
solicitation, or you want to report a possible scam, use the Online
Reporting Form or call the NFIC hotline at 1-800-876-7060.
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