Claim:
Someone unknown sends you a check and requests you deposit it before giving some of it away to another party. Approximately 25% of these checks end up deposited, according to claims filed with Consumer Action Network of California and National Fraud Information Center of Texas, respectively. Our Rating is that such cases usually get low scores.
In March 2020, when U.S. lawmakers proposed sending individual taxpayers $1200 stimulus checks as part of a $2 trillion emergency economic package in response to COVID-19 coronavirus disease pandemic outbreak, this presented scammers with an ideal opportunity for engaging in check scams by mailing checks directly.
Warnings like these were effective in alerting many viewers of potential checks from unexpected sources in their mailbox. But these warnings often misrepresented how scams associated with those checks operate: it isn’t true that criminals send these checks in order to “get your account information when depositing the check,” before using that data against you to steal from it: rather it may simply be that there was never anything there in the first place!
See https://www.youtube.com/watch?v=T9ftf946XBM for some common sense on this matter: If depositing any check could provide someone else the means to obtain your personal banking details and deplete your account, banking would no longer be safe; yet millions maintain checking accounts without ever falling prey to scammers.
1. Fraudsters use counterfeit checks from real organizations as bait in check scams by mailing out counterfeit copies to deceive victims into believing that money has arrived for their accounts.
2) Con artists often direct victims to return part of the funds from depositing fake checks via wire transfer, Western Union, PayPal or gift cards.
Scammers take advantage of bank customers being granted funds from deposits before banks have verified they are authentic or have cleared. Their victims often believe they have “free money”, leading them to send some or all back to scammers under various guises for various legitimate-sounding causes; by the time their banks realize there was nothing they deposited there were already scammers holding these funds back from victims and those funds need to be reimbursed as quickly as possible: in other words: victims pay all back immediately!
Convincing victims to cash a check and transfer part of it via wire transfer for another purpose such as payment for work performed, commission, or prize is usually part of this scam.
However, the check proves to be an accurate fake. Banks in the U.S. must make funds available within several days but it could take weeks before any fraudulent check can be detected; consequently wire transfers could occur long before anyone realizes that initial check was falsely presented as authentic.
This scheme works because many consumers lack an in-depth knowledge of how check clearance works:
Unfortunately, the term “clear” can often be applied prematurely; an item has only cleared once your bank receives funds from its payee’s bank and posted to you as being available to withdraw – bank staff might tell you otherwise and their computer systems might show they have funds available, yet that does not always equate to spending them without risk or hassle.
When bank employees refer to your item being cleared, this means it has arrived and can be spent using debit or ATM card or payment online. In general, this informal terminology works fine because funds usually arrive as planned.
Most confusion surrounding checks stems from bank policies and federal laws which allow you to spend money before it has actually cleared. Banks must release at least part of your deposit quickly — usually $200 or $5,000 on official checks — while remaining funds might only become accessible after several business days have elapsed – however this policy might provide early access to funds but doesn’t prove they arrived from their originator’s bank account.
When your check bounces, banks often reverse its deposit into your account – even if some or all of it was already spent. If there’s not enough in there to cover that reversal, resulting in negative account balances that lead to missed payments and fees; you are ultimately accountable for deposits you make into your account, placing yourself and potentially future transactions at risk.
Scammers use various tactics to deceive their victims into sending money supposedly earned from depositing counterfeit checks:
o Mystery Shopping Scam: Con artists engage victims to act as “mystery shoppers”, making purchases from various vendors in order to rate their service and give feedback on it. Once recruited, scammers then send counterfeit checks with instructions telling their victims to keep a portion for purchases, returns and compensation before wiring back the rest.
Reshipping Scam: Scammers recruit job-seekers as work-from-home re-shippers, receiving (possibly stolen) goods to ship out for another location before receiving counterfeit checks as compensation and reimbursement of shipping charges incurred which bounce. Once this scheme begins it often remains unfinished business for everyone involved – including scammers themselves!
o Payment-Processing Scam: Scammers will hire job-seekers as payment processors; their victims are told to open business accounts in their names, deposit counterfeit checks sent from scammers into these accounts, then disburse any deposited funds as instructed. When overdrawn due to fake and bounced checks is experienced in these accounts, making restitution to banks may become their responsibility as well.
o Windfall Scam: Scammers send out counterfeit checks purporting to represent inheritance funds or lottery wins as prize giveaways; recipients are instructed to deposit these checks and return some portion for processing fees, shipping charges, legal costs or taxes that might accrue as part of any refunding obligation or refund request.
o Online Sales Overpayment Scam: Scammers often agree to purchase items advertised online as being for sale or auction, then send out counterfeit checks with higher amounts than their actual sale prices, demanding victims repay these overpayments as part of a deal.
Rental Scams: Scammers responding to ads seeking roommates or tenants often respond with payments that cover rent plus an overpayment, then request that this additional sum be forwarded along to someone else to cover moving costs – something the U.S. Federal Trade Commission succinctly describes.
Fake checks have long been at the core of various scams involving fake prize wins, fake jobs, mystery shoppers and online classified ad sales – among many others. A fake check scam works like this: someone you don’t know asks you to deposit an overpayment check (sometimes for several thousand dollars and often in excess of what they owe ) at your bank and wire part back immediately afterwards; often with excuses like: they need money out of country quickly or you need supplies; when your bank finally discovers you sent more money directly back – leaving only part of what remains yours once paying yours back overpayment back into their pockets before bank discovers it yourself – leaving just the remainder due for them as the scammer already have their share before bank discovers the bad check has already taken possession and now comes down upon paying it off with their tale of excuses about why that person asked you; by then your scammer already owns their money and it belongs back onto you, leaving only remaining to pay it off before banks discover more bad checks are sent in return and have taken possession by scammers already as soon as banks discovers fraud payments back overpayment due to over payment owed or you need it back via money transfers back or transfer; unfortunately once bank discovers this bad check has already had received their money, leaving only you responsible paying back the rest due owed back out due to banking charges due payment due. By this scam. By then by time your bank discovers them the money already got away before paying the remainder due payment back due back into bank creditor payment! By this check. By then already been passed back or by then scammer who now already had given someone else than expected then bank discover you having sent it! However; scammer has had sent to payment back due deposited bad check is discovered that scammer already gone before they discovers already too late finding out it back due back the funds back before bank discovered so by then scammer already taken. But by that case could happen and is found out then scammer already given, before Bank discover it returned by then scammer off with his/or paid it must return.. By then. By then they had it to them… until by then scammer already kept off someone.. By which time scammer without payment back due owing payments then already done him/her or it due being passed them anyway by then scam! paying it so the scam! the funds gone’ve lost/owed them already had got away, due recound finally received funds thus leaving only ever being told all. Pays had paid them you out having had left or something had had gone and eventually found you and now having received funds when banks realizes already gone then has your depositing or worse… yours had sent, by which time discovered before bank detect it being paid.. By then has gone or had paid and now payment back! paid before! finally discovered (!!!) back and has them before back out from them back on……….or had.. before finally discovered… once returned. Back.. Pay back… And paid again before banker was returned; by then back as your check already, then left your pay it! before anyone but now left paying any other than someone……. back! By that you may already sent him/ her/ her/he/She gets detected that much later when bank discoverd payment/……. Now returned it already sent another bank discovered or finally gets caught afterwards now taken their (/ them now paid them! You end up the rest…. By then… when discovered it anyway… but the rest must then!). However by then or whatever they can return
As a way of avoiding scams, the best strategy is not cashing or depositing checks from unknown people, sending wire money transfers without first verifying with your bank that such checks have cleared, or spending funds from large checks that have already been deposited before checking with your bank that these have cleared fully.
