Tips to Spot Check Fraud

Types of Check Frauds: Tips to Spot and Avoid Check Fraud Schemes

Scams can take many forms as fraudsters are always trying to find ways to be more convincing. They take advantage of gaps in financial knowledge, and weak links in the financial system. By keeping an eye out for these red flags, you can see through the schemes and protect your hard-earned money. Keep this tip from the Federal Trade Commission (FTC) in mind as you read on. 

"Just because funds are available on a check you've deposited doesn't mean the check is good...The bottom line is that until the bank confirms that the funds from the check have been deposited into your account, you are responsible for any funds you withdraw against that check." - FTC

Major Red Flags

  • "Deposit the check and send back money." If you see this language in any form, it is a scam. Scammers are taking advantage of the float period; the time between funds becoming available and the check bouncing. For example, the victim deposits a check for $2,000. The victim sends back $1,500 to the scammer, usually through a hard to trace service, like a wire transfer, MoneyGram, Western Union or gift cards and then keeps "their portion" in their bank account. After the money has been sent off, the check will bounce and the victim not only loses the $500 in their bank account, they also lose the $1,500 that has been sent off to the scammer. The victim must now repay $2,000, and has no way to recoup their loss.

  • "Keep this private, and don't talk to anyone including your bank." One of the best ways we keep from making mistakes is by talking to others. Many potential victims of check fraud have found that by trying to explain their situation out loud to a close friend, family member, or financial institution, they see through the scheme. Remember, your financial institution is there to help, is trained to spot scams, and will help talk you through the situation. If you really don't want to talk to anyone, look it up online. The FTC has a great resource here.

  • "This needs to be done quickly." Because of the limited window that scammers have to perform their con, they will try to create a sense of urgency. Sometimes they are aggressive in their communication, and bully the victim into acting quicker than they otherwise would.

Some of the common schemes involve working from home, lotteries, overpayment, Craigslist, or any number of stories to convince a victim to go against their better judgment. All of these scams involve the victim depositing a check, the withdrawal of funds and sending money back to the scammer. The different types of schemes are the tried and tested ways the scammer tries to rationalize unusual behavior. Remember, this may be the first time you have encountered a convincing scammer, but they have probably carried out this scheme before, and may be simultaneously swindling others. 

If you have any questions about check fraud, please give us a call or visit your nearest service center.


Tips to Spot Check Fraud