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Better Business Bureau ®
Start With Trust®
Central Virginia
BBB Warns Against Three Common Check Scams
July 01, 2009

Experts estimate that billions of dollars have been lost as the result of fake check scams. Scams involving fake checks come in many different forms and can be very hard to identify as the printing technology used by scammers improves. Better Business Bureau warns against three common check scams and offers advice on the red flags to look out for. 

According to a recent survey by the Consumer Federation of America, nearly one-third of adults have been approached by a scammer trying to pass off fake checks and at least 1.3 million people have become victim of the scam with an average loss of $3,000 to $4,000.

“It can be practically impossible to tell a fake check from a real one using only the naked eye because fake checks can be printed in full color and even include watermarks,” said Steve Cox, BBB spokesperson. “Many check scams plaguing consumers in the US are the work of scammers operating outside of the country and originate in Canada, Jamaica and Africa which makes it extremely difficult for law enforcement to track them down and bring them to justice.”

Scams involving fake checks typically require the victim to deposit a check into their bank account then wire money back to the scammers. While the check may initially be deposited into the victim’s bank account—leading to a false sense of security—the fake check will ultimately be discovered within a couple weeks and the bank will take the funds out of the account.  The victim of the scam is out whatever money they sent to the scammers and will be responsible for paying the bank back if their account is overdrawn.

Following are three common scams that rely on fake checks and can cost victims tens of thousands of dollars:

Lottery and Government Grant Scam
Victims receive a letter claiming they’ve won a lottery or qualify for a financial assistance grant.  Included with the letter is a check for at least a partial amount of the total money they have coming to them. The victim is told that, in order to receive the rest of the money, they are to deposit the check and wire back as much as several thousand dollars. The victim is often told this is to cover taxes or administrative fees.  In June, a Nebraska woman lost $58,000 after being told she’d won $11 million in the Jamaica Lottery.

Mystery Shopping Scam
The victim believes that they are going to earn a few hundred dollars by working for a company that provides mystery—or secret—shopping evaluations for businesses. The victim receives a letter in the mail along with evaluation forms, a check and detailed instructions. The victim is to deposit the check into their bank account, and then use the money to purchase items from specified stores and evaluate the customer service the rest of the money is theirs to keep for the work they did. Included in the list of stores to evaluate is Western Union or MoneyGram and the victim is told to wire as much as a couple thousand dollars back to their “employer” and rate their experience with the money wiring service. 

Overpayment Scam
The victim is selling an item through a newspaper classified or an online site such as Craigslist.  A buyer shows interest and asks to pay for the item by check. When the check arrives the amount is higher than the price of the item. The victim is told that it was a mistake and is sometimes asked to wire the extra back or that the extra cost is for the victim to wire payment to a shipping company that the scammer has chosen—of course the supposed shipping company is actually the scammers.

Fake check scams aren’t limited to the schemes already mentioned and BBB offers the following red flags to look out for:

• You’re told you won a lottery or received a grant you didn’t apply for.
• The name on the check does not match the name of the company or individual you’re supposedly dealing with.
• You’re given instructions to deposit a check into your account and promptly wire part of those funds back to the sender or to another specified company or contact.
• Don’t be fooled by a phone call. Just because you’ve spoken to the scammer over the phone, it doesn’t mean they’re not trying to rip you off.

For more advice you can trust from your BBB on avoiding common scams, visit www.bbb.org