Despite the fact that the frequency of checks being written has gone down in recent years, data from the Better Business Bureau shows that the rate and number of fake check scams continues to rise. This particular financial scam is particularly tough to deal with for victims, as the results aren’t often noticed for weeks and unsuspecting clients are often held accountable for issues they weren’t even aware of.
At Wasatch Peaks Credit Union, we’re here to stop this from happening to you. Our checking program offers numerous benefits, including professionals who are on call anytime you need them to help with various financial issues. Let’s go over some of the warning signs that someone might be attempting to involve you in their fake check scam and what you can do to make sure you avoid falling into the trap.
One of the most common fake check scams in today takes place when someone has purchased something from you in a private sale – often an online item. When it comes time for payment, the party attempting the fraud will intentionally send a check for more than the sale price, then claim it was an accident. They’ll give you an excuse, plus ask you to wire the difference between the two sums back to them.
If you fall for this and wire them the money, you’ll soon find that the check they sent you in the first place won’t cash. If this ever happens to you, inform the buyer that you either need to wait for their oversized check to clear your bank account before you wire funds back, or you need them to send a new check for the proper amount. Never send return funds unless you’re sure the check is legitimate.
Strange Payment Formats
In other situations, fraudsters may try to pay you for a service or item using a very unusual format. They may ask if you accept a pre-paid debit card or a bank wire for small purchases that should be able to be handled much more easily. Wired money can be very tough to trace, and pre-paid debit cards are very tough when it comes to recovering funds later. These are red flags that you should be cautious with.
Secret Shopper Program
One specific program that’s used as a legitimate cover for scammers is the Secret Shoppers program. They’ll send you a fake check to deposit in your account, with directions to use some of the money for your secret shopping and then to wire the rest back separately. Because it takes several days at least for the fake check to be discovered, you’ll likely have already wired this money back by the time anyone figures out that the check was fake. At this point, you’ll be on the hook for all money you drew from the fake check.
Avoiding this is simple, luckily: The actual Secret Shoppers program will never send you a check before you’re employed. If this ever happens, you’re dealing with a scammer.
Most people are too smart to fall for this one these days, but it still does happen. You’ll get an email or a letter saying that you’ve won a foreign lottery, with a check that covers all the taxes and fees included on your winnings. All you have to do is deposit the check, wire those fees back, and then they’ll send you the money. Easy! Only the check is fake, and the money you’re wiring back is your own. To avoid this, simply never wire money to someone you don’t know.
For more on avoiding fake check scams, or to learn about any of our small business loans, home loans or construction loan options, speak to the pros at Wasatch Peaks Credit Union today.