You Don’t Have To Be Gullible To Be a Victim of a Check Scam

There are lots of news items and articles about Identity Theft, and for good reason. It’s the fastest growing crime in the US, and the more technological breakthroughs there are the more ways there are to steal your identity.

Scary.

Identity theft isn’t the only thing to be wary of. Thousands of people have become victims of Check Scams, and the numbers are growing every day.

Back when I was dealing with InfectionsRUs, I got to watch a bit of Judge Judy and the People’s Court. I was surprised at the number of people who were being sued because they got a friend to cash a check for them, and when the check bounced (it was counterfeit) they didn’t reimburse the friend. As I was sitting there, coughing up lungs all over the place, I couldn’t help thinking that all of the litigants were idiots. Come on! Who is that gullible?

Well, today I got a warning from my bank about it, and I realized the problem is more far-reaching than I thought. Some of the scammers are so clever you don’t need to be all that gullible.

Who are the victims?

• Ebay, Craigslist and other online sellers. Someone overpays us for an item “by mistake”, then asks us to wire-transfer them back the extra money. Then we find out the check was counterfeit – and we’re out the item AND the money.

I was selling a large ticket item on Craigslist and got contacted by more than one person trying to scam me. I actually set up a meet with one guy before he balked at my cash only requirement, which clued me into the scam he was trying to pull.

• They tell us they want to buy or rent our home. They give us a check that’s too much, then ask us to go ahead and cash it and wire them the difference.
  

This almost happened to a friend of mine who was doing seasonal rentals on a property she owned. She e-mailed me the info and asked what I thought. I agreed with her – a scam. She didn’t fall for it, thank goodness.

• We get notification that we won a lottery or sweepstakes. They tell us to deposit the check, but then ask us to wire them some money to cover taxes or fees or whatever else their crooked brains can come up with.

This one, to me, should have red flag written all over it. Unless you’re a professional sweepstakes and lottery enterer, you’s KNOW you didn’t win any lottery.

• We sign up with a work-at-home company, and they send us a check or money order to deposit and ask us to help “process payments”. We’re told to keep a percentage of the money and wire-transfer them the rest.

This one is a reach for me, too. But I can see how it could happen.

• Someone we meet in a chatroom or on a message board asks for a favor: deposit their check and wire them the money. Or they claim to be in love with me and want to come be with me – can I please cash this check?

It took me over two years of near daily communication to be willing to meet in person someone I’d met online, so there’s no way I’d have gotten into any large financial deals with them, wonderful as they may be. I’ve built friendships with people that over time turned out to be friends-not-so-much, but at least I didn’t fall for this scam.

How does it happen?

The basic premise is the same even if the details differ. Someone sends us a check or money order. They ask us to deposit it into our account and then wire them the money. They sweeten the deal by telling us to keep part of it for our trouble.

The Result Is The Same

The check or money order turns out to be counterfeit. It gets returned to our bank unpaid and the full amount will get deducted from our account. We’re responsible, because we are responsible for every check or money order we deposit to our account.

Why Did the Bank Allow You to Withdraw the Money?

Excellent question, which my bank was kind enough to answer. Federal law requires banks to make funds we deposit available within 1 to 5 business days. Just because we can withdraw cash from our account shortly after making a deposit doesn’t mean the deposited items are valid. According to my bank it can be WEEKS before a check or money order is discovered to be counterfeit and returned to our bank. By them the scammers are long gone, and we’re left holding the bag. The empty bag.

Weeks? Weeks! I wonder how many Ebay sellers have gotten checks for merchandise, even made out for the correct amount, thought they cleared and then had them bounce weeks later. Egad!

Why Didn’t the Bank Know the Check Was Bad?

Well, according to my bank their job is simply to process our financial documents. The employees may not be able to determine if a check is valid. That makes sense, really. How is our local teller supposed to know that a check written on an account thousands of miles away was written on a valid account, and signed by the rightful account owner? It’s just logistically impossible.

So, the buck starts, and stops, with me. And you.

How Do We Avoid These Scams?

From Looks Too Good To Be True: An interesting point about fraud is that it is a crime in which you decide on whether to participate. Hanging up the phone or not responding to shady mailings or emails makes it difficult for the scammer to commit fraud. But con artists are very persuasive, using all types of excuses, explanations, and offers to lead you — and your money — away from common sense.

Well, that’s makes sense. We educate ourselves. And we choose not to participate. Ever.

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