Five Things to Know About Fake Check Scams

Check writing scamsFake check scams are nothing new. In fact, they remain one of the most common types of fraud, so two consumer advocacy groups have joined forces to help educate Americans on how to avoid being taken in by this old yet effective con.

Scams that hoodwink consumers into accepting plausible but phony checks and sending cash to con artists in return abound in various forms, but experts from the Consumer Federation of America (CFA) and the National Consumers League (NCL) say they're easy to identify and avoid -- provided you know how to spot them."Fake check scams are an equal-opportunity fraud," John Breyault, director of the NCL's Fraud Center, said in a statement. "Scam artists are savvy, networked and know every button to push to get consumers from all walks of life to fall for their schemes."

To help protect consumers from becoming victims, the two nonprofits are launching an educational initiative that includes useful tips ("Five Things You Should Know to Avoid Fake Check Scams") and videos highlighting the two most common types of fake check scams, the sweepstakes/lottery and the work-at-home ploys.

Fake checks scams continue to top the list of complaints submitted to the NCL's Fraud Center, which provides consumers with information about telemarketing and Internet fraud and helps victims forward their complaints to law enforcement agencies.

An analysis of complaints to the Fraud Center from 2009 through May 2011 revealed consumers between the ages of 18 and 30 are far more likely to be targeted by work-at-home versions of the scam, while those 66 and older are typically subjected to sweepstakes/lottery check scams.

In work-at-home check scams, younger consumers are supposedly hired as "mystery shoppers" or as "account managers" to process payments for a company. The sweepstakes/lottery variant ensnares older consumers with phony notices promising recipients they've won millions and are free to collect their winnings just as soon as they pay taxes or other fees associated with their "winnings" in advance.

In just about every case where consumers notified the NCL they'd fallen for the scam and sent money, they did so using a wire service. As Consumer Ally has repeatedly warned, you should never, ever wire money to anyone you don't know.

The NCl's Breyault said the dismal economy is fertile ground for scammers looking to take advantage of consumers who are desperate to make ends meet, adding, "Educating consumers about this crime is the first step in taking on the fraudsters."

Want to make sure you're prepared should a scammer come calling? Here are five things you should know to avoid fake check scams:

  1. If someone sends you a check or money order and asks you to send money somewhere in return, it's a scam. This isn't how legitimate sweepstakes operators or other companies operate. If you'd really won, you'd pay taxes directly to Uncle Sam. Legitimate mystery shopper or account manager jobs also don't include wiring money.
  2. A familiar brand or company name is no guarantee of legitimacy. Crooks often pretend to be from well-known companies to gain people's trust. Find the company's contact information, either online or via through directory assistance, and verify the information before you do anything else.
  3. The check or money order may be fake even if your bank or credit union lets you have the cash. You may get your money quickly, usually within one to two days, but your bank or credit union won't know if it's a rubber check or money order until it's been processed, which can take weeks. By the time the fraud has been detected, the crooks have already taken your money and run.
  4. When the bad check or money order bounces, you'll owe your bank or credit union the money. Since you're are in the best position to know if the person who sent you the check is trustworthy, you'll be left holding the bag if he or she isn't. If you refuse to pay, your account could be frozen or closed. You could also be sued and even charged with fraud.
  5. Sending money using a wire transfer service is like sending cash – once a crook pockets it, it's gone for good. Wire transfers aren't like checks that can be stopped or credit card charges that can be disputed. But if the money hasn't been picked up, you may be able to cancel the transaction. Contact the money transfer service immediately if you think you've been scammed.

The complete list of tips and the new videos are available at www.nclnet.org and www.consumerfed.org/fakecheckscams. Visitors to the latter site will also find CFA's brochure about fake check scams, Don't Become a Target, in English and Spanish, as well as other materials. The NCL also operates a site devoted to exposing fake check scams, www.fakechecks.org.

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