A check that has cleared doesn’t mean it’s not a scam!

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I love exposing online scams. Really the biggest benefit is that you, the reader of this blog, is more likely to be suspicious of something if you’ve already read about similar things here. But in addition to that, I just like the idea that I’m ruining some scammer’s chance to steal money from people that actually worked to earn that money.

fake check

 

I try to stay up to date on the latest scams and what the bad guys are thinking up to try to trick people out of their money. But you know what? Sometimes there is a “new” type of scam or maybe a new angle to try and catch people off guard, but in reality, we just keep seeing the same things over and over again. That’s because they keep working, and a lot of people are still not aware of the basics of how these scams work. And there is still a big misconception about how our US banking system works – specifically, about depositing a check.

Let’s take a very common example of a scammer target: someone selling something on Craigslist.

If someone posts an ad on Craigslist, what does the scammer automatically know about that person?

1. They may or may not be “computer savvy” – Craigslist makes it very easy to post an ad, even for someone not very well versed in using a computer or the internet.

2. They want money – obviously, since they are wanting to sell something that they currently own. And it’s probably safe to say that even though they might be expecting to haggle a little bit, they would really love to just get the full price that they listed.

3. They are expecting inquiries from strangers about the item they are selling.

So the scammer, posing as a potential buyer, contacts the seller with some story about being out of the country and wanting to send a cashier’s check for the price of the item PLUS more, in order to cover shipping to their “associate” in some other state.

At that point, even though the newbie seller might be a little suspicious about the whole process, he might also be thinking, “I’m going to be protected, because after all, it’s a cashier’s check!”

Wrong!

Think about the extreme skill it takes to create counterfeit currency. There’s a LOT that goes into that. Well guess what – it’s a whole lot easier to create counterfeit cashier’s checks. You won’t detect that the check is fake. Your bank won’t detect that the check is fake. In fact, the bank won’t even try. They just take it as a deposit just like any other check.

And in a day or two, you can check your balance and you’ll see that the bank has fully released the entire amount of the check to you in clear funds. So you could go to the bank, withdraw the full amount of that check in cash, and they would be fine with it. For a little while.

Rest assured, that check will come back to your bank. And when it does, they will come back to you and want that money back. If you have enough in your account, they’ll take it right from there to cover the loss. If you don’t have enough to cover it, expect a phone call. And this matter is really more than just dealing with a bank overdraft – you deposited a counterfeit check. That’s going to require a pretty good and detailed explanation, and don’t be surprised if the local police get involved. Suddenly your story – “I got it from some guy on the internet” – doesn’t sound so plausible, even though it’s the truth.

There’s a really good reason why Craigslist posts so many warnings about who you decide to do business with, whether you are buying or selling. This is the warning they give to all users:

Avoiding Scams

Deal locally, face-to-face —follow this one rule and avoid 99% of scam attempts.

  • Do not extend payment to anyone you have not met in person.
  • Beware offers involving shipping – deal with locals you can meet in person.
  • Never wire funds (e.g. Western Union) – anyone who asks you to is a scammer.
  • Don’t accept cashier/certified checks or money orders – banks cash fakes, then hold you responsible.
  • Transactions are between users only, no third party provides a “guarantee”.
  • Never give out financial info (bank account, social security, paypal account, etc).
  • Do not rent or purchase sight-unseen—that amazing “deal” may not exist.
  • Refuse background/credit checks until you have met landlord/employer in person.

 

Those guidelines are good to follow not just for Craigslist, but for any dealings you have online.

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