Checking Out Check Scams

December 26, 2015 | Millie Garland-D'Aprile

Checking Out Check Scams

Maybe it’s been a long time since you wrote a check, or maybe you wrote one as recently as last week. Even in 2017, with numerous other options like Bill Pay through Online Banking, Apple Pay™ or Popmoney® available to make payments, people still write and deposit a lot of checks to conduct financial transactions. As surprising as it may be, the check is still alive and well.

Unfortunately, that also means that check scams are still alive and well. Checks can be used to scam innocent people out of money. This fraudulent activity can affect anyone—people of all ages and situations—at any time of year, but it’s especially common around the holidays. It’s easier to be drawn into checking scams than you might think, and it can happen to anyone. The fraudsters keep coming up with new approaches, and the scams can be very persuasive and sophisticated. The best thing you can do is fully understand how check fraud works and do your best to stay vigilant.

What is check fraud?

Check fraud is a kind of criminal act involving the unlawful use of checks to illegally obtain funds that do not belong to the user.

The most common kind of check fraud follows this scenario, with variations designed to appeal to the person being targeted. The person being scammed—let’s call him Pat—is going about his daily routine. Pat meets a “friend” or potential employer through social media who sends Pat a check to deposit. Pat thinks it’s a legitimate check for work he’s going to do or he believes depositing this check will “help out a friend.” However, Pat is told to keep a small portion of the check and quickly return the rest of the money back to the friend or future employer. Pat feels pressured to return the money right away, wanting to be helpful, and follows the instructions of his new friend or employer. Now the fraudster/friend has Pat’s money, but the check Pat received from the fraudster is returned as invalid. This leaves Pat without the money and may also make him responsible for a negative balance in his account. Pat may incur penalty charges for having insufficient funds, and that negative balance could go on his credit report.

Your checks can also be stolen and forged or counterfeited, leaving you to try and prove that you didn’t write them or they are not your checks at all. Sometimes this results in the same negative balance and credit report issues that Pat experienced in the scenario above.

What to do if you are the victim of check fraud

In most check fraud cases, the result is the same—and it’s not a good one for people who have been subjected to a checking scam. Businesses and individuals who accept fraudulent checks go unpaid, often resulting in a large loss for them. Victims of check scams like Pat’s accept the information from the fraudster in good faith, and follow the instructions to send the money back quickly before the check is returned, leaving them to cover that money.

If you realize you have been the victim of a check scam, call your financial institution immediately. Look through your bank statements for any unusual activity and alert your institution if you find anything else suspect. Financial institution practices, such as putting holds on checks, are able to catch some of this fraud, but consumers are the first and best line of defense.

Fraud Prevention Tips

At Mission Federal Credit Union, we take your security seriously. Be aware that Mission Fed will never ask you to provide personal or account information via unsecure email. If someone claiming to be from Mission Fed asks for this kind of information, do not give it to them and alert us right away. Also be careful about sharing important information about yourself on social media.

Protect yourself from identity theft by guarding your home wireless network with encryption on your router and changing any pre-set identifiers and passwords. When it comes to passwords, be sure they are at least eight characters long and unique to each site you use. Finally, never trust emails, phone calls or mail you’re unfamiliar with. If you have any questions about something’s validity, call the number you find on the company website to confirm.

Please be aware that check scams are real, and share the information with your children, friends and parents to help them understand the risks from scam artists. Look here for additional Fraud Prevention Tips from Mission Fed. Know what to look out for when it comes to checking scams—remaining aware of potential scams is the first step in preventing them.

For more information about preventing check fraud and other scams, visit https://www.onguardonline.gov/topics/avoid-scams

Remember that knowledge is power, and a little skepticism can be a good thing. Take care!

Apple Pay is a trademark of Apple, Inc.

Millie Garland-D'Aprile

Millie Garland-D'Aprile

Millie Garland-D’Aprile is VP Operations at Mission Federal Credit Union. She has enjoyed several decades of customer service and operations experience in the financial industry, including 22 years at a local community bank and 18 years with Credit Unions. Millie’s primary responsibilities at Mission Fed include branch support, quality assurance, asset protection and fraud, and she is always delighted to share her experience and insights with colleagues throughout the Credit Union. Millie and her team have been working to help protect members by increasing fraud awareness.

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