Selling Online Scams - Fake Checks

Online Auction Scams  -
Use Caution on Auctions Like Ebay

If you have thought about selling your car over the Internet, or buying and selling on Ebay, here's a warning. Both buyers and sellers need to beware. Fake cashier checks are being used for scams involving Internet purchases.

Here's how the scam works:

  1. The buyer offers to purchase the product being sold, but at the last minute makes up an excuse why he needs to write the check for more money than the cost of the item and asks the seller to wire (Western Union / Money Gram) the excess money back to the buyer.
  2. The seller agrees, deposits the check, wires the money and ships the goods or physically gives them to the buyer.
  3. A week or so later, the seller's bank tells him the check bounced because it was a fake, so the seller's bank account now owes the bank for the amount, AND the police may arrest the seller (for check fraud, counterfeiting, etc.)

This scam works because most people believe that a cashier's check is as good as cash.  That's clearly not true if it is a counterfeit!  And with today's computer and printer capabilities, almost anyone can make a very realistic looking fake check.  People also don't realize that wired money is immediate and irretrievable. Once you wore the money gram, the money is GONE!

How can you protect yourself against check scams when selling something

  • Call the issuing bank identified on the check, to verify the check is good and for that amount.
  • Don't give the buyer the sold property, whether it is a car, DVD's/CDs or anything else, until the
    check has had time to clear. If the buyer wants it immediately, as for cash or see your bank for other methods, like a wire transfer that can be verified more quickly.

Tips for buyers - Avoiding Internet Auction Frauds

Listed below are tips to protect yourself and your family from various forms of Internet fraud:

  • Determine what method of payment the seller is asking from the buyer and where he/she is asking to send payment.
  • When purchasing products over the Internet, it's best to use your credit card rather than PayPal or your debit card. That way, if you have any problems, you have recourse to dispute the charges through your credit-card company before the payment is actually made.
  • Examine the feedback on the seller.
  • Learn as much as possible about the seller, especially if the only information you have is an e-mail address. If it is a business, check the Better Business Bureau where the seller/business is located.
  • Understand as much as possible about how the auction works, what your obligations are as a buyer, and what the seller's obligations are before you bid.
  • Find out what actions the web site/company takes if a problem occurs and consider insuring the transaction and shipment.
  • If a problem occurs with the auction transaction, it could be much more difficult if the seller is located outside the US because of the difference in laws.
  • Ask the seller about when delivery can be expected and if there is a problem with the merchandise is it covered by a warranty or can you exchange it.
  • Find out if shipping and delivery are included in the auction price or are additional costs so there are no unexpected costs.
  • There should be no reason to ever give out your social security number or drivers license number to the seller.

Also see this page about fake lottery winnings checks. 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


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