BBB Tip: Fake Check Scams

  
     
Fake check and money order scams take many different forms, but the underlying con is the same.

check with scam over itFake check and money order scams take many different forms, but the underlying con is the same. Scammers take advantage of the fact that many people don’t understand the rules about check deposits and wire transfers. It is sometimes called the “overpayment scam” because it involves a large initial payment to the target – much more than they are owed for the transaction – and a large refund back to the scammer.

How the Scam Works:

The stories that con artists use vary widely. You might be selling something online and the scammer pretends to be interested in a purchase. Or scammers will “hire” you for a job, such as secret shopping, or tell you you’ve won a sweepstakes prize. In all cases, the amount of the check is “accidentally” far more than the amount agreed to. The scammer instructs you to deposit the check, keep the amount owed, and wire back the difference.

When you deposit the check, the funds will appear to be available within days. However, forgeries can take weeks to be discovered. Eventually the check bounces, but in the meantime you’ve wired back the “overpayment” to the scammer. A wire transfer is like sending cash; once it’s gone, it is very hard to trace.

Tips to Spot This Scam: 

  • Be immediately suspicious of overpayments. A check can bounce even after your bank allows you to withdraw cash from the deposit. Even if a bank representative tells you that a check has “cleared” you can’t be sure it won’t be detected as a fake weeks later. One thing you can be sure of is that you’ll be on the hook for any funds drawn against the amount. 

  • Never send money to people you don’t know, especially if they ask for the money in an unusual form such as wire transfer or prepaid debit card. Do not share personally identifiable information such as date-of-birth, bank or credit card accounts, passwords, etc. with anyone you do not know. Don’t prepay taxes, insurance, or fees on something you have supposedly won.

To report a scam, go to BBB Scam Tracker.

To learn how to protect yourself, go to “10 Steps to Avoid Scams”.

Last Reviewed February 27, 2017