Tips to Avoid Check Fraud

Checks may seem like a relic of the past, but according to the most recent Federal Reserve Payments study, banks process nearly 18 billion checks annually. And, according to data from both the banking industry and government agencies, check fraud is on the rise.

"Chances are you've been the target of a fake check scam," said Corey Carlisle, executive director of the American Bankers Association Foundation (ABA) Foundation. "Maybe a scammer contacted you about an item you listed for sale online, or you saw a too-good-to-be-true offer to work from home on social media. The fraudsters are sophisticated and convincing, and while their scams may vary, there's one constant: check fraud."

Variations on a Scheme

Counterfeit or fake checks are being used in a growing number of fraudulent schemes, including foreign lottery scams, check overpayment scams, and Internet auction scams.
Check overpayment scams target consumers selling cars or other valuable items through classified ads or online auction sites. Unsuspecting sellers get stuck when scammers pass off bogus cashier's checks, corporate checks, or personal checks.

Here’s how it happens:
  • A scam artist replies to a classified ad or auction posting, offers to pay for the item with a check, and then comes up with a reason for writing the check for more than the purchase price. The scammer asks the seller to wire back the difference after depositing the check. The seller does it, and later, when the scammer's check bounces, the seller is left liable for the entire amount.
  • Scammers use high quality printers and scanners to produce realistic-looking checks that contain authentic-looking watermarks, legitimate financial institution names and addresses, and even real routing numbers.
These fakes and scams come in many forms. Could you be a victim? Not if you know how to recognize and report them.

What You Can Do

To raise awareness on the growing threat of fake check scams, the ABA Foundation and Federal Trade Commission (FTC) have released a joint infographic designed to share simple tips to recognize scams and offer advice on how to avoid becoming a check fraud victim. They recommend following these precautions:
  • Slow down. Before you act, talk to someone you trust and contact your bank.
  • Never send money back to someone who sent you a check.
  • Selling online? Consider using an escrow or online payment service.
  • Never take a check for more than your selling price.
  • Spot this scam? Tell the Federal Trade Commission.

Sources: “Fake Check Scams,”; “Fake Checks,”