You are currently viewing 4 Check Scams You Have to Be Aware Of

4 Check Scams You Have to Be Aware Of

Even though many businesses have stopped using checks on a daily basis, there is still a possibility you’ll be a victim of a check scam if someone chooses to use this payment method. The decreased use of checks can make you a target if you don’t know what to watch out for or hardly use them. To avoid these 4 scams, you’ll first need to know how to spot a fake check.

How to Verify a Check and Get Legitimate Copies

Do some research on the person giving you a check before depositing it. To protect yourself from potential fraud, ask yourself the following questions:

  • Who wrote the check, and where did it come from? You never have to pay a fee to receive a check, so if they ask for money before you can receive the check, it’s a scam.
  • Does the account have insufficient funds? Contact the bank where the check was made and ask if the funds are available within the account. Most banks can tell you if the account is valid.
  • Does the check look fake? Make sure the check comes from a legitimate bank, has security features like microprinting and security screens, has no discoloration or smudges, and contains an accurate withdrawal amount. Any doubts? Don’t deposit!
  • Are these checks constantly bouncing? A bounced check doesn’t necessarily mean the person is scamming you, but it does mean they don’t have enough in their account. If you’re a business that receives bounced checks, sign up for a verification service.

Knowing how to recognize a false check is half the battle, but some scammers will use real-looking checks to scam you anyway. 

4 Check Scams to Watch Out For

A typical scam involves a person or a business handing over a money order, check, or cashier’s check to someone they don’t know. Then, they’re asked to wire a part of the amount back to the third party or sender. If the check is cashed, the victim will wire the amount back before realizing it was fraudulent. The bank will expect you to pay the difference.
Watch out for the following scams when receiving a check for an individual or business:

1. Overpayment on Goods Scams

Commonly done through the Internet, the victim is contacted and asked if they could purchase an item for them. The buyer usually lives out of the country or state and typically desires an expensive item, like a house, boat, or car. After the buyer sends over a cashier’s check, the victim is asked to wire the extra money on the check to another person, like an agent.

2. Sweepstakes, Prizes or Lottery Scams

The victim will receive a fax, email, letter, or call from an unknown person. The scammer will tell the victim they’ve won a prize, sweepstakes, or lottery in a foreign country and will receive the check in the mail within a week. The check won’t have the total amount of the money “won,” so the scammer will ask the victim to send over a portion of their funds to receive the rest.

3. Piggyback Business Scam

Scammers will use a business, like a freelance writer or photographer, and then send money to the victims’ company via check after receiving their services. The amount will be higher than what was agreed upon by the two parties. When the scammer “realizes this,” they’ll ask the business to wire the rest of the amount to the other “business” for them.

4. The “Business Doesn’t Exist” Scam

Many victims of check scams are people looking for new job opportunities. Once hired, the “business owner” will ask the new employee to deposit their own money into another bank account or to buy gift cards with pin numbers that are meant for “other clients.” Once the money is transferred, the employee will never hear from the business again.