How to Recognize a Fake Check Scam
Here's what you need to know to avoid fake check scams!
The Internet can be a dangerous place! Scams abound on websites, emails and social media. Those working at home—or hoping to—are often prey to the scammers of the world. Knowing how to recognize work-at-home job scams is key. However, these schemes always look a little bit different, so it’s important to understand the underlying scams (which may or may not be job-related). One such example is the fake check scam.
How Fake Check Scams Work
Basically, the person running the scam convinces the victim to cash a check and then send, via wire transfer, a portion of the money to another location. (The portion kept by the victim is payment of a commission or prize.)
However, the check (or money order) is a very convincing fake, and it will take the victim’s bank some time to discover that the check is no good. U.S. banks are required to make funds available within a few days, but it can take weeks for a fraudulent check to be discovered. However, wire transfers happen almost immediately. So the money that has left the victims account is long gone by the time it is discovered that the check is fake!
What a Fake Check Scam Looks Like
The variation in these scams come in the reason the victim is asked to cash and then send funds. Many of these are job-related. See 5 Work-at-Home Job Scams to Avoid. Beware of these:
Mystery shopping – Mystery shopping can be legitimate; in fact it often is. But there a scam in which a check is sent to cover the cost of purchasing and returning goods, then you are supposed to wire back the money, keeping your cut. See more about mystery shopping scams.
Payment processing jobs – These jobs can look very real when you apply.
You are processing payments for people in other countries. You may even be asked to open a business checking account in your location, but it is in your name and you are on the hook when it is overdrawn.
Lottery, sweepstakes and inheritance windfalls – You’ve won! A check arrives but the scammer asks that an amount must be sent in for taxes and fees. Seems reasonable but the check was a fake.
Auction/purchase overpayment – Never accept payment for more than the agreed upon price. This is a very common way to defraud. When you refund the overpayment but keep the agreed-upon amount, later you find out the check bounced.
Rental schemes – A new roommate or tenant offers to send you the rent and then some if you forward along a payment to the movers or someone else. Guess who is left with no roommate and an overdrawn account?
Reshipping jobs – This involves receiving goods to be shipped elsewhere. You may also receive payments to be wired and this is how it could a check-cashing fraud. However, it could also be money laundering or stolen merchandise.
Money Laundering and Check Cashing Scams
In addition to losing your money in these kinds of check-cashing schemes, it is possible the victim could go to jail.
In reshipping scams or payment processing scams, you could actually receive the money agreed upon, but only because you are participating in money laundering and/or selling stolen goods. In money laundering, the payment might come into the victim’s account via wire or online transfer.
How to Protect Yourself From Check Fraud
It’s simple. Do not cash checks for people you do not know. Do not wire money to people you do not know. There are no legitimate reasons for this.