You may be surprised to learn that while most of us seem to have little use for paper checks these days, check fraud scams are actually on the rise. The Better Business Bureau (BBB) recently released a report warning consumers of this growing danger. In the report, the BBB noted that complaints to government agencies and consumer advocacy groups have doubled over the past three years. Check fraud has become one of the most prevalent forms of consumer fraud, resulting in millions of dollars lost each year.
Over the past decade, banks like North Shore Trust and Savings have put a lot of time and money into building and implementing technologies which offer customers more speed and convenience. Banks have gone to great lengths to ensure these new high-tech delivery channels and payment options are secure from cybercriminals. This has driven the fraudster back toward one of the remaining low-tech payment methods – checks.
Fraudulent check scams can take many different forms. Some of the more common examples include:
- Buying something you advertised for sale
- Paying you to work at home as a product reviewer or mystery shopper
- Offering to pay an “advance” on your paycheck for less than a payday lender
- Asking for your assistance with cashing a check because they can’t themselves
- Giving you the first installment of a prize you have won
In nearly every version of a fake check scam, someone asks you to deposit a check for more than the agreed upon amount you are owed. The scammers always have a good story to explain the over payment. Our staff has heard stories ranging from sad to sensational. In every instance, the fraudster apologizes for the over payment and asks you to kindly send back the extra. Most of the time they will even offer to allow you to keep a portion of the over payment for the inconvenience. The bad actors know that banks must legally make funds from deposited checks available for use within days, while uncovering a fake check can take weeks. This means that a check can still be returned (bounce), even if you believe it has already cleared because you have been allowed to withdraw the funds. Unfortunately, when the bank discovers you’ve deposited a bad check, the funds are withdrawn from your account as the deposit is reversed. You are responsible for paying back the entire amount of the check, even though you no longer have the portion that was given to the fraudsters.