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Beware of Fake Checks Scams and Fraudulent Cashier’s Checks

Beware of Fake Check Scams

Did someone send you a check and ask you to send money back?

If so, that's a fake check scam. The effect of which can have devastating effects on your financial plans. And if you're feeling duped, you're not alone. Attempted check fraud at U.S. banks totaled $15 billion in 2018 (source: American Bankers Association). Hitting closer to home, over the last several weeks Peoples Bank has had several fake cashier checks come in from customers who unknowingly believed he/she was cashing a real check. Unfortunately, that's money out of your account that you'll never get back. 

The reassuring news is that there are safeguards in place to spot check fraud and tips that can help you spot it on your own. Below you'll find information on how the bank is combating the issue, and how you can be an informed customer and recognize a scam. Combating financial fraud is a shared responsibility, so let's work together to ensure a safer and secure financial future. 

What exactly is check fraud?

Scams that rely on getting people to deposit a fake check, withdraw the money, and then send the money to the fraudster – by wire, gift card, or money order.

Here’s an example of how it works: A fraudulent buyer offers to send a cashier's check or money order for an amount much larger than the value of the item and asks the seller to wire back the difference. The seller deposits the check, withdraws cash as soon as the funds are available, and then wires the leftover sum to the fraudulent buyer. Days later, the bank learns that the cashier's check was fraudulent. Unfortunately, by then the seller has lost his or her money and merchandise to a scam. 

There are many variations of check fraud schemes including romance scams, work from home scams, fake lotteries and more. Many ask the victim to wire the money, but some ask for gift cards or money orders. 

No legitimate company will offer to pay by arranging to send a check and asking the seller to send some of the money back, whether by wire, gift card, or money order. If that's the pitch, it's a scam.

How does Peoples Bank Combat Check Fraud?

Peoples Bank uses a wide rage of approaches to counter check fraud including deposit review, fraud detection tools, hold policy, teller/branch controls and customer education.

If my check cleared, am I in the clear?

Just because a check has “cleared” doesn’t mean you’re in the clear.

Under federal law, banks must make money from deposited checks available quickly – usually within two days. But just because you can withdraw the money doesn’t mean the check is good, even if it’s a cashier’s check or money order. Forgeries and fakes can take weeks to be discovered.

Consumers and businesses are responsible for the checks they deposit, because they know best the origin of the check. It can take weeks for a check to be returned as fraudulent. If you withdraw money and the check is returned, you are responsible for paying back the bank. If you are uncertain a check is good, talk to your banker before withdrawing

How can I combat check fraud?

Here are some tips to help spot check scams and prevent fraud:

Don’t share your secrets.

Don’t provide your Social Security number or bank account information to anyone who contacts you online or over the phone. Protect your PINs and passwords and do not share them with anyone. Use a combination of letters and numbers for your passwords and change them periodically. Do not reveal sensitive or personal information on social networking sites.  

Watch out for phishing emails.

Sometimes fraudsters send very legitimate looking emails that appear to come from a financial institution, e-commerce site, government agency or any other service or business. Often, the email urges you to act quickly because your account has been compromised in some way. If you are unsure whether an email request is legitimate, don’t reply, and don’t click on links or call phone numbers provided in the message.

Use online and mobile banking to protect yourself

Monitor your financial accounts regularly for fraudulent transactions. Sign up for text or email alerts from Peoples Bank for certain types of transactions, such as online purchases or transactions of more than $500. 

Shred sensitive papers

Shred receipts, banks statements and unused credit card offers before throwing them away. 

Keep an eye out for missing mail

Fraudsters look for monthly bank or credit card statements or other mail containing your financial information. Consider enrolling in eStatements through online banking to reduce the likelihood of paper statements being stolen. Also, don’t mail bills from your own mailbox with the flag up.

Monitor your credit report

Order a free copy of your credit report every four months from one of the three credit reporting agencies at annualcreditreport.com.

Report any suspected fraud to Peoples Bank immediately by calling 1-800-891-9389.

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There are many different types of financial fraud. To further inform yourself on financial fraud and cyber crime, read our blog post Beware of Banking Fraud Trends and How To Protect Yourself

Information provided by 2021 ABA Issue Summary Check Fraud  © 2021 American Bankers Association