It’s exciting to peer through the window of an envelope and recognize the colored background of a check behind our names. Quickly ripping open the envelope, we get an even greater rush as we see a huge number on that check — and it’s written out to us.
Our first impulse is to immediately deposit the check in our bank account and spend some of it before we wake up and find it’s all a dream. But the Better Business Bureau (BBB) warns us not to do that — or our life may become a living nightmare.
Whitney Quick, regional director for the BBB, held a press conference Sept. 5 at her Cape Girardeau office to announce the release of a new BBB study, “Don’t Cash That Check: BBB Study Shows How Fake Check Scams Bait Consumers.”
“BBB’s research has found that the use of counterfeit business checks, cashier’s checks, and money orders are now used in many of the most common frauds that people encounter on a regular basis,” said Quick. “In fact, complaints registered about fake checks have doubled over the last three years.
“In 2017, the number of victims of fake check fraud registered at BBB, FTC and other regulatory agencies totaled more than 33,000. But, we know that most victims of fraud don’t complain and we suspect the actual number to be closer to 500,000 victims.
“So how does this fraud work? Let’s say I have posted a used car for sale online. A buyer contacts me, agrees to the price, and sends a cashier’s check to cover the price as well as the cost of having the car shipped. I deposit the check, and the next day the bank credits the money to my account. The buyer than asks that I go to Western Union and send some of the money to the company that will ‘ship’ the car. I think I’m protected, since I already have the money in my bank account, so I send some of it to the supposed ‘shipper.’
“A few days later my bank tells me that the check was a counterfeit, and they want their money back. But I’ve already sent much of that money off, and it cannot be recovered.
“So what the crooks know, and many people do not, is that just having the money credited to your bank account does not mean that the check is good.
“These fake checks look very professional. The crooks steal real checks from businesses and other organizations, scan and Photoshop them, and then send them to victims.” (A sample fake check can be seen in the photo behind Quick.)
Some victims are asked to be a “mystery shopper.” They receive a check that they deposit. They are then told to shop and evaluate the store. They are told to also examine the money transmitting service at the store, and to wire part of the money from the check, keeping a portion as their pay. The check is returned for insufficient funds and the “mystery shoppers” are left holding the bag, as they already sent off their own money as instructed.
Other fraud victims are hired to work from home. They receive a check, but then must send money to a third party for a laptop, software or other materials needed for the job. Their original check bounces and they are out the money they sent off for the equipment.
“We have also seen frauds that claim they will hire you to have your car shrink-wrapped with an advertisement for Budweiser, Mountain Dew, or another major advertiser,” continued Quick.
After depositing a fake check, victims are told to go to Western Union or MoneyGram to send money to a company that will wrap their vehicle, but the money really goes to fraudsters.
Other frauds pretend to be from Publisher’s Clearinghouse, telling victims they have won a huge prize. They send a fake check to cover the taxes owed before the prize can be delivered. Victims send back money to pay these taxes or fees and lose their money.
Individuals are not the only victims, Quick noted. The American Bankers Association did a study and found that more than a fifth of the victims in 2016 were small businesses.
All too often, the frauds are successful. “We found that the largest group of victims were those in their 20s, although all the crooks can and do steal from people of all ages,” said Quick.
“There may be as many as 500,000 victims of this fraud every year,” she continued.
Banks often end up being the loser. “Some victims just don’t have the money to cover the loss, and their bank is stuck with the loss. A recent study by the American Bankers Association found that banks themselves lost $789 million to fake checks just in 2016.”
The Post Office is doing what it can to stop this. The Postal Inspection Service stopped $62 billion in fake checks from entering the U.S. in 2017.
Who is behind these scams?
“There have been prosecutions of those operating these frauds,” explained Quick. “All the cases we are aware of have involved Nigerian scammers, and many of the fake checks come from Nigeria.”
The best ways to fight this scam is educating the public and getting law enforcement involved, Quick said.
“If the general public just simply knew that crediting the money to a bank account does not mean that the check is good, it will go a long way to defeating this type of fraud. And, of course, people need to know that cashier’s checks and money orders can bounce — if they are counterfeit.”
“The best thing you can do if you receive a check in the mail is to call us [police],” said Sgt. Rick Schmidt of the Cape Girardeau Police Department. “We can do research for you.” The police can contact other agencies to see if other victims have received similar checks.
Terisa Gentry of Sikeston said she had applied online for a mystery shopper job, thinking “this would be fun.” When her first check arrived, it was for $2,400. Her husband warned her not to deposit it. “This is a scam,” he told her.
Terisa researched this scam through the BBB and saw there were complaints posted. She added her complaint to the others and never cashed the check. She keeps it as a souvenir. “I was excited about it, until I found out it was just a fake,” Gentry said.