Fake Check Scams


An introduction to check scams, including company rep scams

The three key things you need to know about fake or stolen checks/money orders

1. If you accept a check that subsequently turns out to be fraudulent, you may well be required to return the funds and charged a fee.

2. Don’t accept a check or banker’s draft from someone unless you absolutely know and trust them.

3. Remember that, even after the value of the check has been credited to your account, there is still a risk that the money could be taken out of your account if the check turns out to be stolen or counterfeit.

There are numerous different ways a scammer will try and persuade a victim to cash checks, and these are just the most common in our experience.

Common types of check fraud or money transfer scams

  • The overpayment scam (sometimes called the cashback scam) – this is usually where the victim is selling goods and the scammer seeks to buy them. The scammer may express no interest in the goods, and may offer more than the asking price to entice the victim into selling to him. The scammer will send the victim a check or money order for more than the goods are worth, saying either that someone else owed him more and can the victim take it and send on the extra with the goods, or that the scammer wants the extra to be sent to a shipping company. The “shipping company” will be either the same scammer or an accomplice of his. Another fairly common scenario is where the victim is advertising a room or house for rent, and the scammer asks the victim to accept a check for more than the deposit, and send on the balance to him.
  • The investor or loan scam – this usually follows on from another type of scam, for example that the victim has won a lottery or is due to inherit a large amount of money, where the victim cannot afford to pay the fees demanded. The money does not exist, and the scammer is trying to steal fees from the victim. To “help” the victim, the scammer introduces someone (an investor) who can provide the money to pay the fees and will send the victim a check or money order. Alternatively, the scammer may be pretending to be a bank or other financial organisation, and the check is a “loan”.
  • The job or representative scam – this is where the scammer pretends to be a legitimate business which has overseas clients but no way to process their payments. The basic premise is a lie, since no reputable company would supply goods to customers without having reliable means to receive their payments. The scammer offers the victim a job acting as his representative to process incoming payments. The victim is to receive the checks, pay them into a bank account and wire most of the money by Western Union, keeping a small part as their salary.
  • The love scam – the scammer befriends the victim in a chatroom, on a dating site, or through sites like MySpace. After pretending to fall in love with the victim, the scammer will come up with some pretext to ask the victim to cash a check. For example, he may say that someone owes him money, but he’s working abroad and cannot pay it into his own account. The scammer will ask the victim to pay it into their account and send the proceeds to him overseas.


How does the scammer win and the victim lose?

In all the circumstances described above, the basic scam is the same. The check/money order is fake, forged or stolen. Many of the fakes come from overseas banks so they take longer to process in the victim’s home country. The banks like to clear checks for customers as quickly as possible, so they may show some or all of the proceeds of the check in the victim’s account before the bank knows for sure that the check is legitimate. In some countries or states, banks are required to release the proceeds of checks into accounts within a certain number of days. When the victim sees the money in their account, they think that everything is fine, so they send off the money and/or goods being sold to the scammer. Some time later, the bank realises that the check is forged or stolen, and debits the victim’s account. The victim is out of pocket whatever they sent on to the scammer.

How long does it take for a check to clear properly?

Checks can take a long time to go through the system completely so do not assume that it will bounce in a few days or even a couple of weeks. Here’s a scenario where it could take months to bounce: I am in the UK, and I have a checkbook (only it’s called a chequebook here). Say one of my cheques is stolen. I don’t notice and the scammer fills it in and sends it to you; you’re in the US, and you pay it into your account. Your bank checks with my bank, and my bank tells them it’s fine; there’s the money in my account to cover it and the signature looks okay. That has taken a few days. My bank debits my account and your bank credits yours. You think you’re safe now, so you send off the proceeds to the scammer. A couple of weeks later, I get my bank statement, but I don’t look at it properly for a few weeks. When I do, I notice that there’s a cheque I don’t know anything about so I call my bank, dispute the entry, and they investigate it, with your bank’s help. A week or fortnight passes. My bank accepts what I am saying and credits my account again, and asks for the money back from your bank. Your bank then debits your account. That’s taken a few more days, so the whole process has taken about 2 months. It could be longer. There’s no time limit for me to go back and challenge my bank, so that part could take months alone. The only way to be safe is not to pay in the check in the first place.

But my bank will cover the loss, won’t they?

No. In most countries, the law says that it is up to you to ensure you know who you are dealing with – if you are dealing with a criminal, they will say it is your problem, not theirs. The bank will almost certainly not be liable, even if they have shown the amount as cleared, and their terms and conditions spell this out. If you want to be protected, ask your bank to confirm in writing that the check has cleared fully. If they do so, and you act on that and send money, then even if it does later prove to be fake, you’ll be protected. Most banks are unlikely to give you that reassurance so you’ll need to protect yourself.

The other consequences for the victim

We find that victims of check fraud are often worse off by more than just the money or goods they sent. More and more often, the victim finds that their account is closed by their bank, and they may have trouble opening an account with another bank. Banks frequently call the police, so a victim may be arrested or investigated by the police for money laundering.

How to protect yourself

Read the information here, and on the linked websites, and see if the circumstances sound familiar. If they do, you can ask for advice here, and we will do our best to show you whether it is a scam or not. Ultimately, though, if you are at all unsure about a check, money order, cashier’s check or travellers check you have received, you should take it to your bank or local police and tell them you think it may be from a scammer.

More information about check scams

Metropolitan Police Fraud Alert on overpayment scams

National Fraud Information Center guidance

Federal Trade Commission advice to consumers

Joe Wein information on company representative scams, with examples

Check scam news items

CBS News – Check scam victim loses $8,000 and gets arrested

CBS News – Check scam victims lose $7,200

Learn about scammers’ fake sites at aa419. Report scams to the Internet Crime Complaint Centre at IC3.


Examples of “representative” fake check scams

EMPLOYMENT OFFER WITH (10%) COMMISSION?

Hello, My name is Mrs. Liza Lema, CEO of Arville Textiles Limited, an establishment that deals in textile and fabrics material which are very essential for all human. Our clients make out payment for goods supply every week in form of Money Orders or Travelers checks which are not readily cash able outside the United States, so we are recruiting people who are hectic, trustworthy and willing to work from home as a co-representative for our company in processing
payments from our clients in the USA thus he/she will be paid weekly, (Pay is Good).

Kindly reply to (jcorday@verizonmail.com)if only you are willing to work from home part-time and get paid weekly by forwarding the following information:

{1} FULL NAME
{2} PHONE NUMBER/FAX
{3} FULL CONTACT ADDRESS.

Thus Your information will be forwarded to our numerous clients in the states so as to issue out payment.

Hoping to hear from you soon.

Mrs. Liza Lema Arville Textiles Limited
Sandbeck, Wetherby
West Yorkshire, LS22 7DQ
Email:jcorday@verizonmail.com)

Careerbuilder: New vacancy availible?

From: no_reply@careerbuilder.com (no_reply@careerbuilder.com)

Hello,

I’m Rebecca, writing on behalf of 123 Express, Inc. about your resume, would like to invite you to learn more about the job opportunity that we are offering right now for people like you.

First of all you need no prior experience, even though we are value your current knowledge, but we will provide all necessary training when you will join us. Now let’s take a look at what 123 Express, Inc. offers you:

We are looking for nice, dedicated people who are willing to work for our company. We are looking for Correspondence Assistant/Representative.

Requirements:

* Internet Access (very important – you will need to have it otherwise you won’t be able to receive assignments)

* Free time (since you will be accepting packages you will need to be at home during delivery time (usually 9AM-5PM)

* Access to post office (or if you prefer we can get courier pickup your packages from you – not available everywhere)

* Able to lift packages up to 30 Lbs.

* Phone line (though it’s not necessary to have one, it’s recommended)

* You should be 18 years or older

* You need to have PayPal (www.paypal.com) account in order to receive payouts

* You need to have printer (you will need to print out shipping labels)

Responsibilities:

* Accept shipments from delivery courier (USPS/UPS/FedEx)

* Remove old shipping label and put a new one on package

* You need either to go to the postal office and drop off new package or if you had scheduled turn in package to courier

* Report progress into our system

Salary:

* We pay you $30-40 for each parcel
* Payment period – bi-weekly
* We pay your money using PayPal

Misc:
* All materials will be provided to you (shipping labels etc) or will be substituted with equal amount of money in order for you to buy them (compensation)

* This is part-time home based job, but it requires your dedication

If you are interested in our position, reply to info@123-express.com

Thank you for reading.