Did you get a check in the mail? It’s probably fake!

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Summary:
The fake check scam has been around a long time and shows up in many variations. What typically happens is someone receives a check from the scammer for a variety of reasons and is usually asked to use part of the funds to pay some sort of fee, taxes, charges, or other costs associated with the scam.

The victim is also assured that they can keep most of the check amount for whatever the transaction involved. The victim does so and many days later discovers that the check bounced at the bank and they are now liable for the full amount of the fraudulent check including any money they have sent to the scammer or spent on themselves.

Please note: If check scammers are in possession of your personal information, identity theft may occur. How do scams lead to identity theft?

Jump to:
Where did the fake check scam originate?
How do the check scammers make money?
How do the victims lose money?
Fake check scam examples
Check scam blacklist

Where did the fake check scam originate?

The fake check scam is so ubiquitous it’s hard to tell where it originated. Every country has reported it to varying degrees and according to the National Consumer’s League (NCL), fake check scams are the number one type of reported fraud covering more than 40% of total scam complaints and apparently increasing now.

The consumer scam reporting website SCAMGUARD™ found the most common fake check scams are linked to:

• Lottery scams
• Grant scams
• Work at home scams

But the scam doesn’t end there. It has also shown up as a major component of scams related to:

• Employment or job placement
• Mystery shoppers
• Purchase over-payments for goods or services
• Rental properties

We’ll go into detail on each scam and how they work but there are some things they all have in common in addition to the fake check.

How do the check scammers make money?

Scammers are going to ask you to send a portion of the money from the check to a third party. They’ll want to get paid in a way that is untraceable and can be quickly redeemed so the victim cannot stop payment or recover the funds. Payment requests to the scammer after the fake check has been deposited usually take the form of money transfers through:

• Western Union
• Prepaid Visa cards
• MoneyGrams
• iTunes cards
• Amazon cards
• Bay cards
• Other gift cards
• Wire transfers

They have also been known to request bank routing numbers and account numbers with the promise that future or an additional payment(s) will be directly transferred. As you would suspect, that never happens but the scammers now have the victims bank information in addition to any money they received from the fraudulent check transaction.

Our investigations into Common Scams of 2023

How do the victims lose money?

On average, it takes 10 days for a check to clear at any bank. However, many banks will make the funds available after 3 to 4 days and if the victim has enough money in their account or a good banking history-they will be able to access funds from the fake check immediately. It’s the 10-day lag for final check clearance that powers the fake check scam.

In almost all instances, the victim is asked to use the funds from the fake check to make a payment for some sort of fee, service, charge, processing, tax or other fabricated reason. There is always some urgency attached to this request.

In most instances, the scammer will intentionally increase the amount of the check over and above what the victim was promised to make it easy for the victim to use the funds to cover the fabricated cost. The victim feels no pain and too often assumes there’s nothing to worry about because all they’re doing is spending some of the money the scammer has already sent them.

It’s when the bank shows up 10 days later with a fraud alert on the check or an overdraft notice that the victim pays the price and finds out why the scammer created such a sense of urgency before the 10 days were up.

Fake check scam examples

Lottery prize or sweepstakes scams

Lotteries love to advertise their winners, and everyone sees and hears about the person who found out they won a sweepstake when they’re surprised at their front door with cameras rolling and a bigger than life check. Scammers leverage this with lottery/prize scams by informing somebody they’re a winner either by email, phone or even through regular mail. After the congratulatory message, there’s usually a stipulation that taxes be paid on the winnings, but they’re reassured there’s nothing to worry about because they can pay the taxes with the (fake) check they are about to receive.

A sense of urgency always accompanies the request for the tax payment and it usually falls into one of the forms we’ve identified that are untraceable like a wire transfer or prepaid debit card. That alone should be a clue that this is a scam, but the tax payment is not directed to a taxing body or government agency but a company or individual who is identified as someone who will take care of the taxes.

The victim does in fact receive their check and most victims quickly make the tax payment often in the thousands, only to find out as always that the check is fraudulent and they are now responsible for any money drawn on the deposit of the fake check.

Our investigations into Common Scams of 2023

This is one of the instances where the fake check scam can be devastating. Often times the amount of the check is in the tens of thousands or more and while the taxes always seem to be much less, if someone were to quickly pay off their brother’s mortgage, buy their mother or son a new car or find any other way to spend the money within 10 days -the bank will expect them to pay it all back.

Grant scams

Grant scams cross many types of potential grants from grants for college to government grants for healthcare or a cash grant as a gift from a foundation or wealthy benefactor. Once again, there are fees that need to be paid that are defined across a broad range from processing fees, filing fees, legal fees and others.

The scammer informs the person that they will receive a grant in the form of a check and that they can easily pay any fees using those funds. The victim receives the check, promptly pays the fake fees to the scammer, often under the threat of losing the grant if they don’t pay quickly. But, 10 days later, the bank informs the victim that the check is fake and the victim is responsible for any withdrawals taken against the deposit of the check.

Work at home employment scams

Work at home scams have increased significantly as the coronavirus continues to put people out of work and fearful to return to work anywhere in the midst of a pandemic.

These scams present a variety of potential work at home opportunities, but they always have a reason for an upfront payment for training, equipment, licensing, certification or some other fabricated condition of the work at home job.

The scammer reassures the victim that their first paycheck will be more than what they have earned and that they must send the surplus immediately to the scammer to cover the fabricated cost of equipment, books, training and other items on the list.

The victim never sees another check and finds out from their bank that the check bounced, and they are liable for all funds withdrawn plus the full amount of the check. If they actually received any training materials, they soon find they can be found for free on the Internet.

Our investigations into Common Scams of 2023

Job placement scams

A Job Placement Scam promises that a recruiter, Human Resources specialist, or company is interested in hiring the victim for a position. The scammer sometimes motivates the victim to respond to a fake job board or when someone posts their resume on a legitimate job board and the scammer identifies the victim as a mark for the scam.

In some ways, it’s similar to the work from home scam. The victim is informed that they need to cover expenses related to the job ranging from recruiting fees, training, on-boarding, or other fabricated job expenses.

In this instance, they are sent a check for amount of the job-related expenses and are told to quickly forward the funds using the usual untraceable payment methods. The check is for the full amount of the training, often in the thousands and the victim feels grateful that this opportunity has found them. The check bounces and the victim is once again on the hook with the bank for the full amount.

Mystery shopping scams

This is another scam that falls in the category of employment with the promise that the victim can become a mystery shopper for a company.

The scammer typically uses deception to initiate their scam. They do this by creating fake job offers on fake employment websites or through fake ads. These ads claim to be from companies that evaluate businesses based on product quality or mystery shopper performance. The scammer’s goal is to convince the victim to apply and participate in their scam.

Their new job as a mystery shopper involves their first assignment which is to successfully demonstrate their ability to purchase or use a product or service and then evaluate it.

The scammer usually asks the victim to mystery shop businesses, such as companies that sell prepaid credit cards like Walmart or Target, grocery stores like Kroger, Amazon.com and iTunes and even money transfer services like Western Union or VISA.

The whole idea is to ask the victim to buy either prepaid cards from one of these companies or perform a money transfer and evaluate their experience.

The scammer helps the new mystery shopper by sending a check. This check includes payment for the first assignment and money for prepaid cards or money transfer. The scammer’s main objective is to receive the money, no fabricated excuse is needed. This transfer of funds is the job for the new mystery shopper.

The victim dutifully performs their first assignment and is ready to offer their evaluation of the service but never hear another word from the scammer. The only word they receive is from the bank informing them that the check was fraudulent and withdrawn funds must be paid back.

Over-payment for Products or Services Scam

The scammer simplifies the process for the new mystery shopper by sending a check. This check includes the payment for the first assignment and money for the purchase of prepaid cards or money transfers. The transfer of funds to the scammer is the main objective and does not require any fabricated reason or excuse.

The victim feels there is nothing to lose except a good customer and because they have not yet sent the product or performed the service, they feel there is no harm. The bank will tell them another story very soon.

Rental Property Scam

This scam affects landlords and people who are trying to rent property or in a reverse scenario, is used against potential renters.

In the first scenario, the scammer sends a check to a landlord or someone trying to rent their property, but the check is always in excess of the rental amount.

The scammer requests the victim to transfer the excess amount, falsely stating it was an honest mistake or that the excess was intended for a fictitious local moving company who is also involved in the scam, and the money should be transferred to them.

Some people make the transfer and the check they’ve received from the scammer bounces.

In the second scenario, someone responds to an ad or a fake website for a rental property and is informed that they must send a deposit to hold the rental. This is not directly in the category of the fake check scam because the renter’s check is real. Unfortunately, so is the scam and the renter soon finds out the property they’ve rented either doesn’t exist or is not the property of the scammer.

How to avoid a fake check scam?

• Always wait the full 10 days for any check to clear before shipping goods to anyone.
• If someone sends you a check for an amount over what you were expecting and wants you to somehow refund or redirect the excess -it’s most likely a scam.
• To the best of your ability, always try to confirm the legitimacy of a company you are dealing with for the first time.
• A Google search on the Internet can alert you to fake check scams that are current.
• And always remember, if it’s too good to be true… it’s probably a scam.

Attention: Consumers who have been contacted by check scammers could have had their personal information breached. TotalScam!™ highly recommends that consumers whose information has been breached obtain identity theft protection service immediately.

There are several companies that offer identity theft protection in the US. One of the most inexpensive options we were able to find is the protection offered by LifeLock. You can start your protection here.

Disclaimer: The information and opinions contained on this site are not endorsed by LifeLock. TotalScam!™ receives compensation from LifeLock. This helps support our scam prevention efforts.

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