Counterfeit Checks | WaterStone Bank

Counterfeit Check Scams

Since 2007, there has been a significant increase in counterfeit check scams reported

This is mainly due to the advanced copying and printing technologies that are now available mainstream that can create authentic looking counterfeit checks.

The below counterfeit check scams are the most common scams occurring today.


Lottery Scam

You receive a letter and check delivered by UPS or Fed-ex from a company such as: Megabucks Traveller’s Draw, North American Lottery, Publisher’s Clearing House, etc. The letter states that you just won a large sum of money and that the enclosed check is to be used to pay taxes on your winnings.The letter instructs you to deposit the check into your personal account and wire a portion back to the company handling your winnings.

After you wire the money, your bank notifies you that the check deposited is counterfeit and you are responsible for paying back the amount you had withdrawn.

 

Preventive Measures:

  • If it appears too good to be true, it probably is.
  • When dealing with people you don’t know from another country, be cautious.
  • Be wary if you receive notification of winning a lottery or drawing that you don’t remember entering.
  • Beware of lotteries that require you to pay a fee prior to delivery of your prize.
  • Be cautious when you are asked to send additional money to be eligible for future winnings.
  • Playing foreign lottery by phone or mail is a violation of federal law.

E-bay or Craigslist Scam

You are selling something on e-bay or craigslist and are contacted by e-mail by a buyer that is interested in purchasing your item. The buyer tells you he will send you a check or money order to complete the purchase.

You receive the check via UPS or Fed-ex, but find the check is for more than the selling price. You call the buyer to inform him of his mistake. The buyer asks you to deposit the check and wire him the difference minus a little bonus for your trouble.

You deposit the check and send the difference back to the buyer only to discover that the check deposited is counterfeit. You are now responsible for covering the amount withdrawn.

 

Preventive Measures:

  • Prior to depositing the check or sending any money, speak to your bank about how and why you received the check.
  • Until the check has been cleared by your bank, never use the money.
  • Never wire money back for an overpayment of an item you are selling.

The Mystery Shopper Scam

You decide to answer a help wanted ad or you receive an unsolicited phone call about being a mystery shopper. You agree and are sent a check that you need to deposit in your bank account and wire back to your new employer. This is meant to be a test of how good customer service is at Western Union.

After you’ve wired the money back to your new employer you find out that the check is counterfeit. You are now responsible for repaying the bank the amount you have withdrawn.

 

Preventive Measures:

  • Be suspicious of a company that sends you a check only to ask you to wire the money back to them.
  • Research the name of the company and check it’s authenticity on the Better Business Bureau’s web site.
  • Never use the funds deposited until the bank has confirmed the check has cleared.

College Grant Scam

You receive a letter that states you have been approved for a college grant in the amount of $25,000. The check included with the letter is for $2,900 and is meant to be used to pay the Federal and International Administration fees. The letter states you are to deposit the check and wire the money back to the sender.

Once you have wired the money back to the sender you find out the check is counterfeit. You are now responsible for repaying the bank the amount you have withdrawn.

 

Preventive Measures:

  • Research the company that supplied the grant money.
  • Ask yourself: Did I even apply for a grant?
  • Never use the funds deposited until the bank has confirmed the check has cleared.
  • Never wire money back to the sender until the check has cleared.

Cashier's Check Scam

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.

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