Types of Fake Check Scams

Check scams are a type of fraud when an exploiter will try and pass off a fake check in order to exchange it for cash. Usually this type of fraud has an elaborate or enticing lure attached to it in the hopes individuals will believe the tale and hand over money. Check scams are not anything new, for years fraudsters have been trying to rip people off by using fake checks that look genuine. However over time this form of swindling has evolved and emerged in new incarnations which are designed to be convincing.

There are a variety of approaches a scammer will try and use checks to try and exploit their victims, however fundamentally the common ingredient for the fraud recipe is the scammer will provide their prey with a genuine looking check or money order and looks to barter for cash. 

Fake check scams can cost you a pretty penny if you fall victim. According to Fakechecks.org, check scams are a “fast-growing fraud that could cost you thousands of dollars.”

Usually scammers are quite convincing and so well-orchestrated the victim may not find out for weeks that they were duped, and by that time the swindler is long gone and so is the money. With modern technology capabilities, such as high-quality printers, fake checks have become harder to spot. Additionally, the reason why these types of scams are often so successful is because the exploiter knows the victim is ultimately responsible for the fraudulent checks and that the bank will go after the individual in possession to repay the money.

There are many different types of check scams, here are a few of the most common frauds:

• Work-at-home

In this instance scammers ‘hire’ people to work from home, and often these job offers come from legitimate companies as the scammer will impersonate a genuine company in order to sound more convincing.

Part of the job description entails the worker depositing checks into their personal accounts as a part of routine business. The National Consumer League describes the work-at-home scam as “you deposit the checks or money orders you’ll receive and send the money somewhere, minus your “pay.”

Sometimes checks are sent as an advance on profits; this is usually the scenario for start up business schemes. The problem is, in either case, the checks are fake, and the hopeful earner ends up being responsible for any checks they’ve deposited.

• Overpayment scams

These types of scams are convincing in the way that they come through classified ads or Internet auction websites. People looking to sell their goods are duped in the way that their ‘buyers’ hand them a check that is ‘inadvertently’ written out for too much money and the seller has to send the difference.

The Federal Trade Commission (FTC) describes how the scammer fabricates a reason why they must write the check for more than the purchase price of the item and then asks the seller to wire back the difference overpaid. Later, the fraudulent check bounces and by then the ‘buyer’ is long gone and the seller is left responsible for the entire amount of the check.

• Foreign lottery scams

Foreign lottery scams have emerged as one of the most common check scams. Usually the ‘good news’ states you won a substantial sum of money in a foreign lottery. All the ‘winner’ needs to do is take the check, wire money to the sender to cover the costs of taxes and fees and then you can receive the full prize. Sometimes the check is described as an ‘advance’ on the main prize. The checks look legitimate and, the forgeries are so good, even bank tellers often cannot tell the difference.

A general good rule of thumb is, if it sounds too good to be true, it usually is

• Secret shopper scams

In this scenario, scammers target their victims by ‘hiring’ them to be a secret shopper. The secret shopper is asked to assess the quality of a money transfer service. How it works is the secret shopper is given a check and instructed to deposit it in their own bank account and withdraw an equal amount of cash. The next step is to take that cash and wire the money through the designated wire service. The FTC states the person is usually located in Canada. The secret shopper completes their analysis, but no one collects their assessment because the scammer is long gone, having made off with the cash. In the meantime the bank will come after the individual who deposited the check as they are left wondering what happened.

• The ‘good will’ approach

This scam preys on the good-natured attributes of victims; honest people willing to help out a fellow human in need. What happens is the scammer concocts a sob story or other desperate scenario where they need fast cash and do not have ability to cash a check. They write a check and take the cash, but the check is no good. The victim doesn’t usually find out until the bank informs them they are responsible for the money designated on the fake check.

Unfortunately check scams continue to emerge with different scenarios designed to rip unsuspecting victims off and remain a very common type of fraud. If you want to avoid being duped, it is a good idea to understand what a check scam is and the different types of approaches exploiters will use in order to cheat you out of money.

The LA Times reported the Consumer Federation of America estimates “one of every three adults has been approached by someone offering a fake check at one point.” About two percent of those individuals are ripped off by $3,000 to $4,000.

The above are some of the most common scams, however it is important to keep in mind that swindlers continue to devise new ways to scam people out of money, and vigilance, common sense and caution are always a good approaches when faced with these decisions.