What You Need to Know About Fake Check Scams and How to Avoid Them

person handing over a written check

One of the most common instruments used to commit fraud against consumers is fake checks. Before you deposit an unexpected check or wire funds to someone you don’t know, you should be aware of how fake check scams work. Read on to find out what you need to know about fake check scams and how to avoid them.

How Do Fake Check Scams Work?

person filling out blank checkThere are many variations of fake check scams. It usually starts with someone offering to buy something you advertised, pay you to work at home, give you an “advance” on a sweepstakes you’ve won, or give you the first installment on the millions you’ll receive for agreeing to transfer money in a foreign country to your bank account for safekeeping. Fraudsters will issue you a check or money order worth more than the amount owed to you and instruct you to wire the excess funds back to them before receiving your lump sum payment. After you send the money, you’ll find out the check or money order is fake.

How Can I Prevent Fake Check Scams?

It’s important to know how to prevent fake check scams. Here are 6 tips to follow:

1. Even if the check has cleared, you might not be safe. Banks must make deposited funds available quickly, but just because it’s available to withdraw doesn’t mean the check is good even if it’s a cashier’s check or money order. If you have questions about whether or not a check is real, talk to your banker. Be sure to explain the source of the check, the reason it was sent to you, and whether you are being asked to wire money back.

bike wire transfer from computer2. Don’t be fooled by the appearance of the check. Scam artists create counterfeit checks that mirror the appearance of legitimate checks. Some are counterfeit money orders, cashier’s checks, or look like they are from legitimate business accounts. The companies’ names that appear may be real, but someone has dummied up the checks without them knowing.

3. Never pay to play. One red flag that it is a scam is when someone gives you money and then asks you to wire money back or sends you more than the exact amount. If a stranger wants to pay you for something, insist on a cashier’s check for the exact amount, preferably one from local bank or one with a local branch.

4. Don’t respond to online solicitations for easy money. Keep in mind that easy money is rarely legal money. Social media scams like card cracking offer “quick ways to earn extra cash,” then get you to provide a debit card for withdrawal of fake check deposits.

5. Verify the requestor before you wire or issue a check. It’s important to know who you’re sending money to before you send it. Just because someone contacted you doesn’t mean they are a trusted source.

magnifying glass over wooden blocks that say fraud6. Report any suspected fraud immediately. Bank staff are experts in spotting fraudulent checks. If you are suspicious that someone is trying to pull off a fake check scam, don’t deposit it. Contact your banker and report it to the Federal Trade Commission or The Better Business Bureau’s Scam Tracker.

About Tennessee State Bank

Tennessee State Bank has been serving our local community for over 48 years. With branches in Sevier County, Knox County, Cocke County, and Jefferson County, we offer convenient banking services in East Tennessee. Whether you’re looking to open a checking account, obtain an auto loan, or apply for a home mortgage, we make the process as simple and straightforward as possible. Tennessee State Bank’s motto is “Banking at its Best!”SM, and we strive to live up to that creed every day. Let us know how we can help you by sending us a message via our Contact Form.

Tennessee State Bank is Member FDIC and an Equal Housing Lender.

“Fake Check Scams.” American Bankers Association, https://www.aba.com/advocacy/community-programs/consumer-resources/protect-your-money/fake-check-scams

“How to Avoid a ‘Card Cracking’ Scam.” American Bankers Association, https://www.aba.com/advocacy/community-programs/consumer-resources/protect-your-money/how-avoid-card-cracking