Counterfeit Cashier's Check Scams

If it sounds too good to be true... it probably is.
     Counterfeit check scams are defrauding consumers across the country. The most common type of scheme involves a counterfeit cashier’s check which was traditionally considered a trusted form of payment. The introduction of high quality printers and scanners makes it easy for counterfeiters to produce official-looking checks of all types and caliber, including cashier’s checks.

A counterfeit cashier’s check scam occurs when a consumer unknowingly deposits a counterfeit check into their checking or savings account and then withdraws funds based on their bank’s “Funds Availability Schedule.” The consumer assumes that the deposited check is good before the check has cleared the bank it is drawn on. Consumers are responsible for any funds they may have withdrawn from their account before their financial institution can collect the funds from the bank the check is drawn on.

The amount of time it takes for the bank to “finally collect” the money for the deposited check can vary, particularly with out-of-state or out-of-country checks. A deposited check can take several days or weeks to make its way to the bank it is drawn on for payment or to be returned unpaid as it has been identified as fraudulent or counterfeit.

Once the bank is informed that a deposited check is counterfeit, it will deduct the amount of the check from the account it was deposited to. It is important to be aware that because a bank’s funds availability policy may allow a consumer to withdraw funds from the deposited check this does not mean that the check is good. A consumer is responsible for all checks returned unpaid to the bank and must replace the funds.

Here are some examples of cashier’s check fraud:
  • A consumer receives a check because they won an “international lottery” and is advised to deposit the “winnings check” and then pay a clearance fee or taxes.
  • A consumer responds to a work-at-home opportunity, and then receives a cashier’s check from their new employer. The employer advises the individual to deposit the check and then wire money elsewhere.
  • An online auction seller accepts a “certified check” for payment from the buyer. The seller sends the merchandise and later discovers the check was counterfeit.
In most cases, victims state they wired money back to the issuer of the cashier’s check only to find the deposited cashier’s check was counterfeit.

Here are some tips to help you evaluate the legitimacy of checks you receive from individuals or businesses you do not know:
  • Independently verify the check is drawn from an actual account at a legitimate financial institution. Do not rely on the telephone number listed on the check; use directory assistance or the Internet to get the telephone number of the financial institution and call them to verify the check.
  • If you deposit a check that you were not expecting to receive or cannot confirm the reason as to why you received it, do not rely on or use deposited money until the funds have been collected by your financial institution.
  • If you have questions about whether a check you received is legitimate, speak with a banking representative before depositing the check or using deposited funds.
  • If you have specific questions regarding WaterStone Bank’s “Funds Availability Schedule,” please visit any branch or call Customer Service.