At HarborLight Credit Union, we feel it’s important to keep both ourselves and our members informed and up to date about issues that affect us all. I mentioned last time about that fake PayPal email I received, and I promise that I will finish that story next time.

(If you missed the first part, you can catch it here.)

Just as there are hundreds of different debit/credit card scams, there are also numerous ways that scam artists are trying to trick you involving fake cashier’s checks.

As technology improves and advances, so does the ability for fraudsters to create counterfeit cashier’s checks. A common misconception is that cashier’s checks are risk-free. If it’s a cashier’s check than it can’t be fake. Sadly, this is no longer true.  Cashier’s checks are attractive to scam artists for that particular reason.

They are getting so good at forging them that it’s even hard for employees at financial institutions to tell the difference. Many times the fake cashier’s checks will have the name and address of a legitimate institution and often may have the correct routing and/or account number.

The problem with counterfeit cashier’s checks is that just because your financial institution made the funds available does not automatically mean that the check is legit. It could take several days or longer to discover it is fraudulent, and you will be held responsible for the amount of the check if it is returned as counterfeit.

One common scam involving fake checks is what is sometimes referred to as the Craig’s List scam. For example, let’s say that you are selling a lawnmower online for $500. Someone responds to your ad and wants to buy it using a cashier’s check. When you get the check in the mail you notice that it is made out for $1,000. The buyer will usually come up with an excuse as to why the check is made out for more and that you should just wire the difference back to them.  The check bounces and you are liable for the entire amount of the check.

Are any warning bells going off in your head? I like to think of myself as a pretty truthful person. But let’s be honest. If someone sent me a check made out for too much money, I might be tempted to keep it all. If you had made an honest mistake and overpaid someone, would you trust a complete stranger to send the money back? I wouldn’t.

Another popular scam is the secret shopper scam. In this situation you are “hired” to evaluate a particular money transfer service.  The instructions are to take the check you receive to your financial institution and cash it. Than you are to go to a money transfer service, like Western Union, and wire the funds back.  The check bounces and you are liable for the entire amount of the check.

This isn’t to say that all cashier’s checks are fake and that you shouldn’t use or accept them as forms of payment. Like anything, it is important to know the facts and be educated when it comes to your finances.

Some things to keep in mind:

  • Be suspicious of any checks that you receive from someone that you don’t know or trust.
  • If you are selling something, do not accept a check written for more than what you were selling for. If the buyer won’t agree to this, send back their check and move on. Ask yourself; why would they trust you, a perfect stranger, to send their extra money back to them.
  • Keep your goods until you have received your money and you know that it is legit. I once heard someone refer to this as the “Golden Rule.” He who holds the gold, makes the rules.
  • If there is a sense of urgency or a time limit, than odds are it is too good to be true.
  • If you are notified that you won a lottery or cash prize of some sort, and are asked to send back a portion of your “winnings” for taxes or processing fees, don’t do it. A legitimate sweepstakes or lottery will automatically pay any taxes or fees out of your winnings before sending it to you.
  • If you do happen to receive a cashier’s check or any other check that you believe may be fraudulent, you should contact the financial institution it was issued from to verify it. Look up a phone number or address from a source that you trust. Do not assume that any contact information on the check is correct. If the check is phony, odds are that the phone number and/or address on it are too.

 

Above all else, trust your gut. If anything strikes you as odd about the situation than do some research before you agree to anything.  If it sounds too good to be true than it probably is.  By staying informed on the latest fraud trends and scams, you can protect yourself from becoming a victim.