The progression of modern technology has made it increasingly simple for con artists to manipulate both consumers and financial institutions. The use of counterfeit checks is on the rise, and even bankers themselves can have a difficult time detecting check fraud. Sometimes weeks can pass before discovering they aren’t legit. According to the American Bankers Association, the U.S. Postal System Inspection Service seized approximately 35,000 fake checks totaling more than $40 million in 2014. Because the use of checks for transactions is growing, it is essential to authenticate a check before you deposit it.
There are several types of cashier’s check scams. Here are a few examples:
- Craigslist – Scammers on Craigslist offer to buy an item you are selling, and will insist on paying in advance. Some may even offer to pay more than the asking price. For example, if you were selling a laptop for $500, the scammer may offer to pay $700. The scammer sends a cashier check and the seller mails the laptop. The seller then cashes the fake check and, upon discovery, must repay the monies to the bank.
- Foreign Lottery – Scammers will inform victims that they have allegedly won the lottery in a foreign country. Victims are then instructed to write a letter “claiming” their lottery winnings, but must also pay “taxes and fees” before receiving their prize or money. A fake cashier’s check is used to finance those taxes and fees, and the scammer asks the victim to wire it back.
- Check Overpayment – When sale items are posted on classified ads or online auction websites, the scammer will “accidentally” write a check with an increased amount than the original sale price. They will then ask the seller to wire back the difference. For example, if you were selling an item for $200, the scammer would send you a check for $800 and ask you to send back $600.
How can you avoid becoming a victim of cashier’s check fraud?
- If someone is offering more money than you’re asking, don’t accept it – Scammers offer to overpay for an item or service. Ask the buyer to send you a check with the right amount. If it’s a scammer, they will most likely refuse to do so.
- Use PayPal or a credit card – These offer protections to consumers if they were to be scammed. It is nearly impossible to get your money back with wire transfers.
- Keep it local – If you are a seller and accept payment by check, ask for a check to be drawn from a bank with a local branch. This way, you can make sure the check is valid by personally going to the bank. Another option would be calling the bank to check for validity.
If you have additional questions, contact the Office of Consumer Affairs and Business Regulation by calling our Consumer Hotline at (617) 973-8787, or toll-free in MA at (888) 283-3757, Monday through Friday, from 9 am-4:30 pm. Follow the Office on Facebook and Twitter, @Mass_Consumer. The Baker-Polito Administration’s Office of Consumer Affairs and Business Regulation along with its five agencies work together to achieve two goals: to protect and empower consumers through advocacy and education, and to ensure a fair playing field for all Massachusetts businesses. The Office also oversees the state’s Lemon Laws, data breach reporting, Home Improvement Contractor Program and the state’s Do Not Call Registry.
America Saves Week posted on Feb 27
Developing a savings habit can be difficult, especially with wages that aren’t meeting rising expenses and young adults lacking financial knowledge. Saving money is worth the effort, and America Saves Week (February 27– March 4, 2017) promotes this very idea. Founded in 2007, this …Continue Reading America Saves Week
The Form W-2 Scam: When it’s OK to Say No to your Boss posted on Feb 23
Tax season is here. Unfortunately, this also means tax season scams are here and we’ve got the proof. Our office has received several data security breach notifications since the start of 2017 from companies that have fallen victim to the Form W-2 scam. How does this …Continue Reading The Form W-2 Scam: When it’s OK to Say No to your Boss
Understanding Your Financial Institution’s Data Breaches posted on Feb 21
The Commonwealth’s Data Breach Notification Law, Mass. General Law, Chapter 93H, requires businesses and other entities that own or license personal information of Massachusetts residents to notify the Office of Consumer Affairs and Business Regulation and the Office of the Attorney General when they …Continue Reading Understanding Your Financial Institution’s Data Breaches