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You Won a Lottery, Got an Award, or a Mystery Shopper Job and They Sent You a Check!
Counterfeit Cashiers Checks
If you receive an email or letter in the post /
regular mail saying you won a lottery and they send you
a check? Or you sold something on Ebay and the buyer
paid with a check? Or you took out a loan from a
distant or online bank and they sent you a check? You
can just take the check to your bank and cash it right?
WRONG! And what is worse, if you cash it, in most states in the US, you
may be guilty of passing a counterfeit check, money laundering or worse.
Clark Howard
did a piece on his radio show about a man in California who was arrested for
cashing a bogus check. In other words, by merely attempting to cash the check,
you could go to federal prison!
Here is an actual example:
I got a letter in the today from Imperial Foundation Lotto, apparently in
Canada, claiming that I have won, an enclosed check for, $2,998.60. The check
is from a sponsoring company named "Aaron Industries, Inc., 11865 South
Alemeda Street, Lynwood CA, 90262". In the letter it goes on to explain that
I need to call for check verification and other details to claim my "prize
money". This is an obvious scam and I wanted to bring this to your attention
so no one gets caught up in this. The Imperial Foundation Lotto does not
have an email address any where the net that I can find. Please let me know
if I can give you any more info.
Click here to see a scan of a
real scam letter and check received from "International Lotto Inc" in the mail.
And this page has another
example, from "International Sweepstake".
Here is a "unclaimed
sweepstakes winnings" check and letter received in the mail in 2008.
And here is another report, received February 20, 2008:
I got a letter from a "Security Capital Market
Research" requesting that I be a secret shopper. They mailed a check in the
amount of $3,800 to cover my pay, moneygram evaluation, the service charge
and fees for shopping. I deposited check and once my bank cleared it I
moneygramed money to them and a week later their check bounced. Now I
have to repay back my bank!
Usually, the scammers will claim that you have to use the money from the
first check to pay "fees" and "taxes" before you get the big payout. Gullible
people assume that since they receive a real check (counterfeit) it must be
legitimate. Remember, ANYONE can print a check, that doesn't mean that the
account is real or the money is there!
The "you won our lottery" scam is the most common means used by these
scammers, but you must be suspicious of ANY check your receive from an unknown
or unexpected source.
The counterfeit cashier's check scheme also targets
individuals that use Internet classified advertisements,
such as Ebay, to sell merchandise.
See this page for more information.
And Comparison
Shopping Solutions is another check scam.
Quick Summary: What Can you Do?
You can check the name of the issuing bank on the check with the names of
banks that have reported stolen checks
and you can call the bank to
- verify that the account number on the check is legitimate and
- matches the name on the check and
- has sufficient funds.
You can go to this website and
verify the routing number on the check and get the bank's phone number, then
call the bank to verify that the account is real and the check is real.
If you believe you may have fallen victim to this type of scam and wish to
report it, please file a complaint
with the U.S. government
Internet Fraud Complaints
Center
Here is a
summary of this type of fraud, from the United States Postal Service
More Information: How does the fake check / cheque scam work?
The check is no good, even though it appears to be a legitimate cashier’s
check. The lottery or Ebay seller or "payment transfer" job angle is a trick to
get you to wire (Western Union or MoneyGram) money to someone you don’t know.
If you deposit the check and wire the money, your bank would soon (several
days to as long as 6 weeks) learn that the check was a fake. And when the check
finally clears the system and bounces, you’re out the money because
- the money you wired can’t be retrieved, and
- you’re responsible for any check you deposit — even though
you can’t know whether they're fake or genuine.
These are very important points. The checks may look real and even have
real account numbers on them. Your bank may be able to confirm that the
bank it is drawn against is real and the account is also real. But that
does not mean that the check itself is genuine.
For example, it could be a simple forgery.
- Someone stole the blank checkbook and write forged checks.
- Or a criminal stole checks that were delivered to a person's mailbox.
- Or a criminal, working as a clerk in a store, copied down your account
number and bank when you paid by check, and used this information to make
forgeries.
See the movie "Catch Me If You Can", starring Leonardo DiCaprio, for a good
example of how this was done even 40 years ago. Modern computer, scanner
and printer technologies make it very easy for criminals to make real looking
forged checks.
Many fake checks look so real that bank tellers are reporting being fooled.
The scammers use high quality printers and scanners to make the checks look
real. Some of the checks contain authentic-looking watermarks. These counterfeit
checks are printed with the names and addresses of legitimate financial
institutions. And even though the bank and account and routing numbers listed on
a counterfeit check may be real, the check still can be a fake.
These fakes come in many forms:
- cashier’s checks
- money orders
- corporate
- personal checks.
This is just one example of a counterfeit check scam that could leave you
scratching your head. The Federal Trade Commission, the nation’s consumer
protection agency, wants you to know that counterfeit check scams are on the
rise.
Fake Checks: Variations on a Scheme
Counterfeit or fake checks are being used in a growing number of fraudulent
schemes, such as:
- foreign lottery scams (as described above),
- check overpayment scams,
- Work from home scammers (eg. payment transfer manager)
- Internet auction scams, and
- secret shopper scams.
Check overpayment scams
These target consumers selling cars or other valuable items through
classified ads or online auction sites. Unsuspecting sellers get stuck when
scammers pass off bogus cashier’s checks, corporate checks, or personal checks.
Here’s how it happens:
A scam artist replies to a classified ad or auction posting, offers to pay
for the item with a check, and then comes up with a reason for writing the check
for more than the purchase price. The scammer asks the seller to wire back the
difference after depositing the check. The seller does it, and later, when the
scammer’s check bounces, the seller is left liable for the entire amount.
Secret shopper scams
The consumer, hired to be a secret shopper, is asked to evaluate the
effectiveness of a money transfer service. The consumer is given a check, told
to deposit it in their bank account, and withdraw the amount in cash. Then, the
consumer is told to take the cash to the money transfer service specified, and
typically, send the transfer to a person in a Canadian city. Then, the consumer
is supposed to evaluate their experience — but no one collects the evaluation.
The secret shopper scenario is just a scam to get the consumer’s money.
Con artists who use these schemes can easily avoid detection. When funds are
sent through wire transfer services, like Western Union, the recipients can pick
up the money at other locations within the same country; it is nearly impossible
for the sender to identify or locate the recipient.
Isn't the Bank Responsible to Verify the Checks?
Under federal law, banks must make funds available to you from U.S. Treasury
checks, official bank checks (cashier’s checks, certified checks, and teller’s
checks), and checks paid by government agencies at the opening of business the
day after you deposit the check. For other checks, banks must similarly make the
first $100 available the day after you deposit the check. Remaining funds must
be made available on the second day after the deposit if payable by a local
bank, and within five days if drawn on distant banks.
However, just because funds are available on a check you’ve deposited doesn’t
mean the check is good. It’s best not to rely on money from any type of check
(cashier, business or personal check, or money order) unless you know and trust
the person you’re dealing with or, better yet — until the bank confirms that the
check has cleared. Forgeries can take weeks to be discovered and untangled. The
bottom line is that until the bank confirms that the funds from the check have
been deposited into your account, you are responsible for any funds you withdraw
against that check.
Actions to Protect Yourself
Here’s how to avoid a counterfeit check scam:
- Don't pay by check! Credit cards are much safer.
- Never pay any "fees" for prizes. Throw away any offer that asks
you to pay for a prize or a gift. If it’s free or a gift, you shouldn’t have
to pay for it. Free is free.
- Do NOT to enter foreign lotteries. It’s illegal to play a foreign
lottery through the mail or the telephone, and most foreign lottery
solicitations are phony.
- Never wire money to strangers. If a "lottery", "promotion"
or buyer insists that you wire back funds, end the transaction immediately.
Legitimate buyers don’t pressure you to send money by wire transfer
services. In addition, you have little recourse if there’s a problem with a
wire transaction.
- If you’re selling something, don’t accept a check for more than the
selling price, no matter how tempting the offer or how convincing the
story. Ask the buyer to write the check for the correct amount. If the buyer
refuses to send the correct amount, return the check. Don’t send the
merchandise.
- Use Escrow Services: As a seller, you can suggest an alternative
way for the buyer to pay, like an escrow service or online payment service.
There may be a charge for an escrow service. If the buyer insists on using a
particular escrow or online payment service you’ve never heard of, check it
out. Visit its website, and read its terms of agreement and privacy policy.
Call the customer service line. If there isn’t one — or if you call and
can’t get answers about the service’s reliability — don’t use the service.
To learn more about escrow services and online payment systems,
see this page.
- Only take checks from local banks - If you accept payment by
check, ask for a check drawn on a local bank, or a bank with a local branch.
That way, you can make a personal visit to make sure the check is valid. If
that’s not possible, call the bank where the check was purchased, and ask if
it is valid. Get the bank’s phone number from directory assistance or an
Internet site that you know and trust, not from the check or from the person
who gave you the check.
- Resist any pressure to “act now.” If the lottery is real or the
buyer’s offer is good now, it should be good after the check clears.
If You Think You’re a Victim
If you think you’ve been targeted by a counterfeit check scam, report it to
the following agencies:
For More Information
The FTC works for the consumer to prevent fraudulent, deceptive and unfair
business practices in the marketplace and to provide information to help
consumers spot, stop, and avoid them. Click here to file a
complaint or to get free
information on consumer issues, or call toll-free, 1-877-FTC-HELP
(1-877-382-4357); TTY: 1-866-653-4261. The FTC enters Internet, telemarketing,
identity theft, and other fraud-related complaints into
Consumer Sentinel,
a secure online database available to hundreds of civil and criminal law
enforcement agencies in the U.S. and abroad.
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