Don’t cash that check

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Better Business Bureau issues scam warning

Editor’s Note: While credit cards remain the payment of choice for many retail customers, the use of checks is still a frequently used form of payment. In recent years, WEDA members have been victims of purchases made with stolen credit cards, checks written on phantom accounts or cashier’s checks and money orders designed and printed from home computers. The Better Business Bureau recently issued a study about the use of fake checks. Following are some things to protect your business from being a target.

While consumers may write fewer checks (or cheques, in Canada) in this era of electronic financial transactions, fake check scams are on the rise, according to a Better Business Bureau report, “Don’t Cash That Check: Better Business Bureau Study Shows How Fake Check Scams Ensnare Consumers.” 

Study Link: https://www.bbb.org/article/news-releases/18367-dont-cash-that-check-better-business-bureau-study-shows-how-fake-check-scams-bait-consumers

The study found the largest group of victims of fake check frauds are in their 20s and the losses may hit hard. Small businesses, lawyers, and banks also suffer losses from these scams. For example, the American Banking Association survey for 2016 found that bank losses from small business accounts increased to 22 percent for fake check fraud, up from 14 percent from two years before.

The study, conducted by the BBB International Investigations Initiative, looks at how fake checks dupe consumers. It digs into the scope of the problem, who is behind it, and the need for law enforcement and consumer education to address the issue.

Fake checks are used in a variety of frauds, from employment scams to prize and sweepstakes fraud. In all cases, victims deposit the check and send money back to scammers. 

Scammers are often successful because consumers don’t realize: 

1. Crediting a bank account does not mean the cashed check is valid.

Federal banking rules require that when someone deposits a check into an account, the bank must make the funds available right away – within a day or two. Even when a check is credited to an account, it does not mean the check is good. A week or so later, if the check bounces, the bank will want the money back. Consumers, not the fraudsters, will be on the hook for the funds.

2. Cashier’s checks and postal money orders can be forged.

A cashier’s check is a check guaranteed by a bank, drawn on the bank’s own funds and signed by a cashier. If a person deposits a cashier’s check, the person’s bank must credit the account by the next day. The same holds true for postal money orders. Scammers use cashier’s checks and postal money orders because many people don’t realize they can be forged. 

Fake check fraud is a huge problem, with complaints to consumer groups doubling over the last three years. 


Fraud involving fake checks is rapidly growing and costing billions of dollars. Fake checks were involved in 7 percent of all complaints filed with BBB’s Scam Tracker. The number of complaints received by the Federal Trade Commission’s Consumer Sentinel database and the Internet Fraud Complaint Center more than doubled between 2014 and 2017. 

The National Consumers League, which also receives complaints from fraud victims at https://fraud.org, found that fake checks complaints in 2017 were up 12 percent and was the second most common type of complaint over all, after online order issues. 

Nigerian gangs appear to be behind most of this fraud, often using romance fraud victims and other “money mules” to receive money from victims. Many fake checks and money orders are shipped to the U.S. from Nigeria. 

What to do if you have deposited a fake check into your account:

  • Notify your bank or the bank that appears to have issued the check.
  • File a complaint with any of the following:
    • Better Business Bureau
    • The Federal Trade Commission or call 877-FTC-Help
    • The Internet Crime Complaint Center or IC3
    • The U.S. Postal Inspection Service
    • Western Union – 1-800-448-1492
    • MoneyGram – 1-800-926-9400
    • Green Dot – 1-866-795-7597
    • Canadian Anti Fraud Centre (toll free from the U.S. at 1-888-495-8501)
  • Victims who are seniors or other vulnerable adults may be able to obtain help through Adult Protective Services, which has offices in every state and many counties. Find a local office at elderjustice.gov.

Spotting a fake check

Regardless of the format, the checks usually look professional and convincing. Fraudsters have been known to obtain the names and account information of legitimate businesses by fishing inside mailboxes with sticky tape or even stealing entire mailboxes off the street, hoping to find business checks inside. Crooks then scan and Photoshop checks.

High quality check stock is easy to obtain. Fraudsters often replace the phone number on the check with a number they can answer if someone calls the “business” to see if the check is legitimate. To test the actual validity of a check, consumers should not call a phone number printed on the check but should instead look up the telephone number for the supposed source of the check and call directly to see if it is real.

Review the Elements of a Fake Check illustration above to see what to look for if you’re suspicious about whether a check is authentic. Share this information with any dealership employee who handles financial transactions.


Beware of scams

10 things to watch for

There are thousands of new scams every year, and neither regulators or you can keep up with all of them. But if you can just remember these 10 things, you can avoid most scams and help protect yourself and your family – even your business.

  1. Never send money to someone you have never met face-to-face. Seriously, just don’t ever do it. And really, really don’t do it if they ask you to use wire transfer, a prepaid debit card, or a gift card (those cannot be traced and are as good as cash).
  2. Don’t click on links or open attachments in unsolicited email. Links can download malware onto your computer and/or steal your identity. Be cautious even with email that looks familiar; it could be fake.
  3. Don’t believe everything you see. Scammers are great at mimicking official seals, fonts, and other details. Just because a website or email looks official does not mean that it is. Even Caller ID can be faked.
  4. Don’t buy online unless the transaction is secure. Make sure the website has “https” in the URL (the extra s is for “secure”) and a small lock icon on the address bar. Even then, the site could be shady. Check out the company first at www.bbb.org. Read reviews about the quality of the merchandise, and make sure you are not buying cheap and/or counterfeit goods.
  5. Be extremely cautious when dealing with anyone you’ve met online. Scammers use dating websites, Craigslist, social media, and many other sites to reach potential targets. They can quickly feel like a friend or even a romantic partner, but that is part of the con to get you to trust them.
  6. Never share personally identifiable information with someone who has contacted you unsolicited, whether it’s over the phone, by email, on social media, even at your front door. This includes banking and credit card information, your birthdate, and Social Security/Social Insurance numbers.
  7. Don’t be pressured to act immediately. Scammers typically try to make you think something is scarce or a limited time offer. They want to push you into action before you have time to think or to discuss it with a family member, friend, or financial advisor. High-pressure sales tactics are also used by some legitimate businesses, but it’s never a good idea to make an important decision quickly.
  8. Use secure, traceable transactions when making payments for goods, services, taxes, and debts. Do not pay by wire transfer, prepaid money card, gift card, or other non-traditional payment method. Say no to cash-only deals, high pressure sales tactics, high upfront payments, overpayments, and handshake deals without a contract.
  9. Whenever possible, work with local businesses that have proper identification, licensing, and insurance, especially contractors who will be coming into your home or anyone dealing with your money or sensitive information. Check them out at www.bbb.org to see what other consumers have experienced.
  10. Be cautious about what you share on social media and consider only connecting with people you already know. Be sure to use privacy settings on all social media and online accounts. Imposters often get information about their targets from their online interactions, and can make themselves sound like a friend or family member because they know so much about you.

Information for this story provided by the Better Business Bureau. For information, visit www.bbb.org.


Written by WEDA Staff

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