Imagine: You receive a letter from a foreign lottery office to let you know you have won! Best of all, the letter includes a cashier’s check to cover the taxes and fees. All you have to do is deposit the check, wire the money for the taxes and fees to the sender, and you’ll receive your prize. It’s your lucky day! Or is it? Well, here's the catch: It's a scam.
The check is no good, even though it appears to be a legitimate cashier’s check. The lottery angle is a trick to get you to wire money to someone you don’t know. If you were to deposit the check and wire the money, your bank would soon learn that the check was a fake. And you're out the money because the money you wired can’t be retrieved, and you’re responsible for the checks you deposit — even though you don’t know they’re fake.
This is just one example of a counterfeit check scam. With all types of check fraud on the rise, could you be a victim? The best way to level the playing field is to know how to protect yourself.
Here's how to avoid a counterfeit check scam:
- Throw away any offer that asks you to pay for a prize or a gift. If it's free or a gift, you shouldn’t have to pay for it. Free is free.
- Resist the urge to enter foreign lotteries. It’s illegal to play a foreign lottery through the mail or the telephone, and most foreign lottery solicitations are phony.
- Know who you're dealing with, and never wire money to strangers.
- If you’re selling something, don't accept a check for more than the selling price, no matter how tempting the offer or how convincing the story. Ask the buyer to write the check for the correct amount. If the buyer refuses to send the correct amount, return the check. Don’t send the merchandise.
- If you accept payment by check, ask for a check drawn on a local bank, or a bank with a local branch. That way, you can make a personal visit to make sure the check is valid. If that’s not possible, call the bank where the check was purchased, and ask if it is valid. Get the bank’s phone number from directory assistance or an Internet site that you know and trust, not from the check or from the person who gave you the check.
- If the buyer insists that you wire back funds, end the transaction immediately. Legitimate buyers don’t pressure you to send money by wire transfer services. In addition, you have little recourse if there's a problem with a wire transaction.
- Resist any pressure to “act now.” If the buyer’s offer is good now, it should be good after the check clears.
If You Think You're a Victim
If you think you’ve been targeted by a counterfeit check scam, report it to the following agencies:
- The Federal Trade Commission
- The U.S. Postal Inspection Service
- Your state or local consumer protection agencies. Visit naag.org for a list of state Attorneys General, or check the Blue Pages of your local telephone directory for appropriate phone numbers.
Source: “Fake Checks,” www.consumer.ftc.gov.