Scam Spotlight Series: Protect Yourself from Fake Check Scams

Fake check scams are a prevalent form of fraud where individuals receive counterfeit checks and are tricked into sending money before the check bounces. These scams often involve scenarios like mystery shopping, online sales, or job offers. The scammer sends a check, asks the victim to deposit it, and then requests a portion of the funds to be sent back or forwarded to someone else. By the time the bank identifies the check as fake, the victim has already lost the money sent.

The Impact of Fake Check Scams

According to the Federal Trade Commission (FTC), fake check scams have led to significant financial losses.  In 2023, consumers reported losing nearly $138 million to fake check scams, with a median individual loss of $1,900. These scams continue to be a significant threat, affecting individuals across various demographics. The FTC's Consumer Sentinel Data Spotlight also reported that consumers in their twenties are more than twice as likely as people 30 and older to report losing money to these scams.

Real-Life Scenario: How Jose Was Nearly Scammed

Jose, a recent college graduate, was looking for part-time work to supplement his income. He came across an online ad for a mystery shopping opportunity that promised good pay for evaluating local businesses. After applying, he received a check for $2,500 with instructions to deposit it, keep $500 as his fee, and use the remaining $2,000 to purchase gift cards and send the codes back to the company.

Skeptical, Jose consulted his bank before depositing the check. The bank staff examined the check and identified it as counterfeit. They explained that had he deposited the check and followed the instructions, he would have been responsible for the full amount once the check bounced. Thanks to his caution and the bank's assistance, Jose avoided falling victim to the scam.

Note: Jose's story is a fictional example created to illustrate how fake check scams operate and to protect the privacy of real individuals.

Common Types of Fake Check Scams

Fake check scams come in many forms, but they all follow a similar pattern: you receive a check and are asked to send money back in some way—before the check ultimately bounces. Here are the most common types to watch out for, as identified by the Federal Trade Commission (FTC):

• Mystery Shopping Scams: You're "hired" to evaluate a store or service. The scammer sends a large check and asks you to buy gift cards or wire money as part of your assignment.
• Personal Assistant Scams: A fraudster poses as a new employer offering you a remote assistant role. You’re sent a check to buy office supplies—often from a “vendor” controlled by the scammer.
• Car Wrap Decals: You’re promised hundreds of dollars per week to put an advertisement wrap on your vehicle. The check you receive includes “extra” money you’re instructed to send back to an installer or service provider.
• Prize or Sweepstakes Scams: You’re told you’ve won a prize or lottery, but you need to cover taxes or fees by depositing a check and sending part of it back.
• Overpayment Scams: This often targets sellers on online marketplaces. The scammer “accidentally” sends you too much money and asks you to refund the difference after you deposit the fake check.

Each of these scams is designed to look legitimate, but they all rely on urgency, deception, and delayed detection of fraudulent checks.

Tips to Avoid Fake Check Scams

• Be Wary of Unsolicited Offers: If someone sends you a check unexpectedly and asks you to send money back, it's likely a scam.
• Verify Before You Act: Consult with your bank to verify the authenticity of any check before depositing it.
• Understand Bank Policies: Funds from a deposited check may be available quickly, but that doesn't mean the check has cleared. If the check is fake, you are responsible for repaying the bank.
• Avoid Pressure Tactics: Scammers often create a sense of urgency. Take your time to verify the legitimacy of any offer.
• Report Suspicious Activity: If you suspect a fake check scam, report it to the FTC at ReportFraud.ftc.gov.

For more information on how to spot, avoid, and report fake check scams, visit the FTC's official guide: How To Spot, Avoid, and Report Fake Check Scams.

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About the Scam Spotlight Series:

Each month, we shine a light on the latest scams that fraudsters use to trick people into giving up their money or personal information.  In 2024, consumers reported losing over $12 billion to fraud, with 20-29 and 70-79 year olds being the most targeted age groups, according to the Federal Trade Commission. By sharing real-life examples, we aim to uncover the tactics scammers use, helping you recognize and avoid their schemes. Along the way, we’ll also provide practical tips to safeguard yourself and your loved ones. At Rivers Edge Bank, your safety and security are our top priorities—because protecting your hard-earned money starts with staying informed.  To learn more about cybersecurity best practices, visit our Cyber Security page.