Over the last year, there has been a rise in fraudulent check scams. Fraudsters are banking on the fact that most people have limited knowledge and will unknowingly deposit fake checks into their account. Below are three common scenarios:
- Online marketplace: A prospective buyer mistakenly sends you a check for more than the agreed-upon sale amount. They instruct you to deposit it into your account and send them the difference. Once the fraudulent check is returned, the scammer is long gone, and you’re left in the hole.
- Work-from-home: Your new “employer” sends your first payroll check and asks for you to send money back for supplies. Just like with the scenario above, the “employer” knowingly sent a fake check and now has your money.
- Sweepstakes: You are contacted as the winner of a sweepstake—or lottery—that you don’t remember entering. However, the winnings can’t be claimed until after you send money to cover taxes and/or fees. Again, the scammer uses the temptation of fake funds to get real money.
In each of these situations, there are a few questions you can ask yourself that would help identify if it’s a scam.
- Did you receive a check for more than you were expecting?
- Were specific instructions provided on how to deposit the check and send money back (money order, gift card, wire transfer, etc.)?
- Are you directed to act quickly to make the deposit and return the money, and/or does the person who sent the money keep asking when you’re going to send it?
- Did the communication you received have spelling and grammar errors?
If you answered ‘yes’ to any of these questions—don’t deposit the check.
There are other ways to protect yourself if you’re unsure your situation may be a scam. We’ve put together a list of what to look for so you can spot a fake.
Wrong bank information. If a bank logo is included on the check, it is often faded, suggesting it was copied, or an old version of the bank’s logo was used. Also, verify the address information. Sometimes scammers will use a P.O. Box or get the zip code wrong. The easiest way to verify these details is to contact the issuing bank using the phone number on their website.
The amount is under $5,000. Federal rules require that deposits under $5,000 are made available sooner, while larger amounts are subject to longer holding periods. This tricks some people into thinking the check was “good” because they had the money available in their account. Keep in mind that it can take weeks for a bank to confirm that a check is bad. However, once the fake check is rejected, the financial institution will reverse the credit and could impose a fee for the returned item.
Account, routing, and check numbers. Sometimes fake checks either won’t have a check number in the upper right corner, or the number won’t match the check number in the Magnetic Ink Character Recognition (MICR) line. At the bottom of every check, there is a series of numbers and symbols that represent the account, routing, and check numbers (the MICR line). The first nine (9) digits are the routing number, which identifies the issuing bank. These are easily verified either on the bank’s website or the Federal Reserve Financial Services website.
Don’t let yourself become a victim to check scams. If you’re suspicious about a check you received, schedule an appointment with a Yolo Federal representative, and we’ll be happy to help review your situation and determine the validity of your check.