Verifying a check can protect consumers from fraud. If you are unsure of a check you’re depositing, it’s wise to verify it ahead of time.
Since fake check scams can come in all shapes and sizes, it’s crucial to take additional precautions when depositing money in your account.
If the check is identified as fake or counterfeit, the recipient will likely be responsible for the money sent to the scammer. So, to avoid counterfeit checks, here’s how to verify a check and avoid future scams.
Recommended: Are Checkbooks Still Useful?
Verifying a Check
Banks must deposit check funds quickly, sometimes as fast as two days by law. The bank may say that a check has cleared and the funds are available for use, but this doesn’t necessarily mean that the check is valid. It can take a few weeks to identify a fake check in some cases, and by that time it might be too late.
To determine if a bank check or cashier’s check is valid, consumers may have to do more than just a physical inspection of the check.
Here are a few ways to identify if a check is fake or valid.
• Ensure a legitimate bank issues the check. Although a valid bank might issue some fake checks, a sure giveaway of a fake check is that a fake bank name is on it. To locate an FDIC insured bank in the US, consumers can use the FDIC BankFind .
• Call the bank the check is from. Look up the bank’s phone number on its website instead of using the phone number listed on the check. The number on the check might be a part of the scam, so it’s essential to call the official direct line to confirm the check’s validity. The bank might need the check number, issuance date, and amount to confirm if the check is real.
• Complete an ABA routing number lookup. Developed by the American Bankers Association in 1910, the ABA routing number identifies the financial institution responsible for the payment. To make sure a check is valid, use a routing number lookup system for verification.
• Take into consideration the origin of the check. If the check came from an unknown source, it’s wise to be skeptical of the payment. Scammers usually communicate via email or text message, which may contain grammatical errors.
• Confirm the address the check was mailed from. If a check has a postmarked address that doesn’t match the issuing bank, it may denote a fake check. Be extra wary of any check that is sent from overseas.
• Look for watermarks, security threads, or other security features printed on the check. If a scammer copies any of these features, the quality is often questionable.
• Compare the check amount to the request. If the check amount is greater than the expected amount, this is a sign of a hoax the scammer may use to get the check receiver to wire funds back to them when the check is deposited.
Check Scams to Look Out For
Although fraudsters are coming up with new scams all the time, there are a few current common scams to be aware of.
Get Rich Quick Scams
In this scam, the scammer contacts a check recipient and says that they won the lottery or are entitled to an inheritance, usually from another country. The scammer says they will send a cashier’s check with the proceeds, but the recipient must pay the fees and taxes. So, they are instructed to deposit the funds and wire money to the scammer for taxes and fees.
Online Auction Scams
Some scammers may visit an online auction site or classified listing site, and bid on an item, pay in advance for a service, or rent an apartment. The scammer will then send a cashier’s check, usually for more than the price agreed upon. Once you bring this to their attention, they will request the recipient to deposit the check and then send the extra funds back to them before you find out the check was fake.
Secret Shopper Scams
With secret shopper scams, scammers pretend to have a job opportunity that allows employees to work from home. The scammer may send a check as a starting bonus and request the employee pay the activation fee. The hope is that the scammer receives the funds from the activation fee before the fake check bounces.
Another way secret shopper scammers take advantage of people is by hiring someone and stating their first assignment is to review retailers that sell gift cards. In this case, the shopper may get a check with instructions to deposit it into their account and then wire the funds to a third party. Unfortunately, once the funds are wired to someone else, the third party vanishes.
Personal Assistant Scams
Scammers sometimes try to hire personal assistants online. Once the scammer hires someone, the scammer may send a check and tell the new employer to use the money to purchase gift cards, supplies, or equipment for the client. After the scammer receives the gift card PIN, they can use the funds right away. This will leave the personal assistant without the money when the bank determines the check is counterfeit.
Taking Action If You’re Scammed
If you have wired funds to a scammer, reach out to the company transferring the money as soon as possible, reporting the fraud, and filing a complaint.
Two commonly used money transfer companies are Western Union™ and MoneyGram®, and both have departments dedicated to fraud awareness. If you think you may have been scammed, you can report suspected fraud to the money issuer by phone.
• Western Union Fraud Hotline at 1-800-448-1492.
• MoneyGram Customer Care Center at 1-800-926-9400.
Both companies also have online forms that can be used to report suspected fraud. You can request a transfer reversal and, while it’s unlikely they will do this, it’s essential to ask at least.
If you used a money order to pay the scammer, reach out to the money order issuing company. Ask if you can request a stop payment or if they can stop the delivery of the money.
If you sent the money order by US mail, try reaching out to the U.S. Postal Inspection Service® or another service carrier you used.
In the event, the scammer requested gift cards, contact the gift card issuing company immediately and explain that the company’s gift cards were used in a scam. If you contact them quickly, they might be able to refund the money. Remember, gift cards are not a form of payment, they are a gift. So, it’s a red flag if someone is trying to pay you using gift cards.
Recommended: Ordering Checks – A Complete Guide
While you can’t prevent fraudsters from attempting to steal your money, you can take steps to keep your money safe by using a secure bank account. With a SoFi Money® cash management account, you can instantly freeze your account online or via the app if you notice suspicious activity. If unauthorized activity occurs, you can contact SoFi for help resolving the issue.
A SoFi Money cash management account also has other safety measures in place, such as two-factor authentication, chip technology, and suspicious activity monitoring services to protect your cash. And, accounts are fee-free, so you can use your money the way you want to.
Learn more about SoFi Money today.
Photo credit: iStock/andresr
SoFi Money is a cash management account, which is a brokerage product, offered by SoFi Securities LLC, member FINRA / SIPC . Neither SoFi nor its affiliates is a bank. SoFi Money Debit Card issued by The Bancorp Bank.
SoFi has partnered with Allpoint to provide consumers with ATM access at any of the 55,000+ ATMs within the Allpoint network. Consumers will not be charged a fee when using an in-network ATM, however, third party fees incurred when using out-of-network ATMs are not subject to reimbursement. SoFi’s ATM policies are subject to change at our discretion at any time.
Third Party Brand Mentions: No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third party trademarks referenced herein are property of their respective owners.
External Websites: The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.