How to Avoid Fake Check Scams

Each year, fake check scams cheat tens of thousands of people out of millions of dollars collectively. In fact, in 2019 alone, the Federal Trade Commission reports that 27,000 fake check scams resulted in $28 million in losses. And since, for now, checks are one of the most common ways to conduct a financial transaction, it’s wise to know what to look out for.

Four Common Check Scams and How to Avoid Them

1.The Fake Stimulus Check Scam: That’s right, crooks have found a way to make the pandemic even worse: by taking advantage of the financial help from Uncle Sam. A common stimulus check scam involves a text or email informing you that your stimulus check is ready: all you have to do is click on a link and provide your financial or other sensitive information for verification. They might also call you on the phone asking for this personal information. The information usually includes bank account numbers, social security numbers, your date of birth, or similar data. Scammers use these to steal your money or your identification.

How to Protect Yourself: The IRS will never send unsolicited texts, emails, or phone calls, so this is a dead giveaway that it’s a scam. Also, the IRS uses the term “Economic Impact Payment,” not Stimulus Check. If you have any doubts about a communication, call the IRS directly or visit their secure website.

2. The IRS Tax Refund Check Scam: In this fraud, after stealing your personal information, a scammer then files a tax return in your name and has a refund check sent to you or deposited in your bank account. Then, he or she tries to reclaim the money from you through deceptions, like demanding it was a mistake and that you must repay the money into a certain account. The demands can seem very intimidating and real: calls from supposed IRS agents, threats of arrest warrants or criminal charges, or “blacklisting” your Social Security Number. And to make matters worse, when you file your real tax return, the IRS rejects it because they believe one was already filed and a refund given, causing more financial loss.

How to Protect Yourself: The IRS will only contact you through the mail and will never threaten you or threaten legal action over the phone. It is important that you guard your personal and financial information carefully.

3. The “Overpayment” Scam: This fraudulent buyer scam works the same whether you are leasing out your house or apartment or selling a car or couch. After agreeing on a price (often full price, without haggling), the “buyer” sends you a check or money order that looks real. Then, shortly after, he or she informs you that they made a mistake and made the check out for too much. For instance, you agreed on $3,000, and they made it out for $3,500. Worse, they claim, it’s put them in a financially bad position, so could you please wire them the difference (the $500 in the above case). Your wire “reimbursing” them goes through immediately, but their check bounces, and you’re their latest victim.

How to Protect Yourself: The main giveaway to this scam is that most of the time, the perpetrator makes up an excuse about why they can’t meet in person. “Your car is exactly what I’ve been looking for, but I’m out of town, so I’ll send you a check now, and my brother will pick the car up later,” they’ll say. Don’t fall for it.

4. Fake Check Scam: Whether it’s someone giving you a bogus check for an item you’re selling or someone sending you a phony check and asking you to give them cash in return, fake checks are a common scam. And because of the delay in a check clearing your bank account, the counterfeiter could be long gone with your money or goods before you discover the scam. Fortunately, there are ways to spot a counterfeit check.

How to Protect Yourself: First, make sure it’s a legitimate bank’s name on the check; you’d be surprised how many times it’s not, or it’s misspelled. If you’re unsure, search the name on the FDIC’s BankFind site. Next, if the check was mailed to you, see if the postmark on the envelope matches the city on the check. Be especially wary if it was mailed from a different country. Finally, look for security features such as watermarks, security threads, or color-changing ink. Counterfeiters can copy these, but often their quality is poor and obvious.

At IDB Global Federal Credit Union, we take pride in keeping all members up to date when it comes to fraud and how to avoid becoming a victim. For additional tips on how to protect yourself from check-cashing fraud, visit our Fraud Alerts page. Additionally, members can sign up for check cleared alerts within online banking. Alerts and notifications are customizable and should be part of your financial management.

If you believe that you might have been a victim of any of these or other financial scams, please contact us immediately by phone at +1 202-623-3363, email, or via our new digital support solution. We are closer and even more available to you in new ways, like video call and chat, that you can easily access from your computer or phone. Currently available within our website, Online Banking, application platforms, and Mortgage Center during business hours (9 a.m. – 5 p.m. EST).

From all of us at IDB Global Federal Credit Union, we thank you for your continued trust in us as your financial partners anytime, anywhere.