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How Fraudsters Use Fake Check Scams to Rip People Off

By Edited Aug 6, 2016 2 4

Check scams are a type of fraud where an exploiter will try and pass off a fake check in order to exchange it for cash. This type of fraud usually has an elaborate or enticing lure attached to it in the hopes the targeted victim will believe the tale and hand over money. Check scams are not anything new, for years fraudsters have been trying to rip people off by using fake checks that look genuine. However, over time this form of swindling has emerged in new forms which are designed to be convincing. Technology has played a large role in how check fraud and other schemes are evolving.

Fake check scams can cost you a pretty penny if you fall victim. According to Fakechecks.org, check scams are a "fast-growing fraud that could cost you thousands of dollars." 1 There are a variety of approaches a scammer will try and use checks to try and exploit their victims, but fundamentally the common ingredient for the fraud recipe is the scammer will provide his or her prey with a genuine looking check or money order and look to barter for cash. 

Fraud alert
Credit: Geralt/Pixabay (Public Domain image)

Usually, scammers are quite convincing and so well-orchestrated victims may not find out for weeks that they were duped and, by that time, the swindler is long gone - and so is the money. With modern technology capabilities, such as high-quality printers, fake checks have become harder to spot. Additionally, the reason why these types of scams are often so successful is because the exploiter knows the victim is ultimately responsible for the fraudulent checks and that the bank will go after that individual to repay the money.

There are many different types of check scams, here are a few of the most common frauds:


In this instance scammers “hire” people to work from home, and often these job offers come from legitimate companies as the scammer will often impersonate a genuine company in order to sound more convincing.

Part of the job description entails the worker depositing checks into his or her personal account as a part of routine business. The National Consumer League describes the work-at-home scam as "you deposit the checks or money orders you’ll receive and send the money somewhere, minus your “pay.” 2

Sometimes checks are sent as an advance on profits; this is usually the scenario for start-up business schemes. The problem is, in either case, the checks are fake, and the hopeful earner ends up being responsible for any checks they've deposited.

Along with the work-at-home scams are frauds stemming from websites that people use to find work as caregivers, nannies or pet walkers. If using these sites, your personal information is out there. Beware of anything out of the ordinary. Scammers use social engineering tactics to defraud honest people out of their money. 3

Working from home
Credit: Unsplash/Pixabay (Public Domain image)

Overpayment Scams

These types of scams are convincing in the way that they come through classified ads or Internet auction websites. People looking to sell their goods are duped in the way that their "buyers" hand them a check that is - oops! - accidentally written out for too much money and the buyer asks the seller to send back the difference.

The Federal Trade Commission (FTC) describes how the scammer fabricates a reason why he or she must write the check for more than the purchase price of the item and then asks the seller to wire back the difference overpaid. 4 Later, the fraudulent check bounces and by then the fake buyer is long gone and the seller is left responsible for the entire amount of the check.

Foreign Lottery Scams

Foreign lottery scams have emerged as one of the most common check scams. Usually, the “good news” states the targeted victim has won a substantial sum of money in a foreign lottery. All the “winner” needs to do is take the check, wire money to the sender to cover the costs of taxes and fees and then receive the full prize. Sometimes the check is described as an advance on the main prize. The checks look legitimate and, the forgeries are so good, even bank tellers often cannot tell the difference.

Credit: Hermann/Pixabay (Public Domain image)

The “Good Will” Approach

This scam preys on the good-natured attributes of victims; honest people willing to help out a fellow human in need. What happens is the scammer concocts a sob story or other desperate scenario where he or she needs fast cash and does not have ability to cash a check. The person will write a check and take the cash, but the check is no good. Victims don’t usually find out until the bank informs them they are responsible for the money designated on the fake check.

Unfortunately, check scams continue to emerge with different scenarios designed to rip unsuspecting victims off and remain a very common type of fraud. To avoid being duped, it is a good idea to understand what a check scam is and the different types of approaches exploiters will use in order to cheat you out of money.

Secret Shopper Scams

In this scenario, scammers target their victims by “hiring” them to be secret shoppers. The secret shopper is asked to assess the quality of a money transfer service. How it works is the secret shopper is given a check and instructed to deposit it in their own bank account and withdraw an equal amount of cash. The next step is to take that cash and wire the money through the designated wire service. The secret shopper completes his or her analysis, but no one collects on any assessments because the scammer is long gone, having made off with the cash. In the meantime, the bank will come after the person who deposited the check as the victim is left wondering what happened.

Free Money

In 2015 a number of people received checks in the mail. For no reason whatsoever, just “free money” sent to them. What scammers do is get personal information and send potential victims checks in the mail. Later, the alleged prize-winner will be contacted and told he or she was overpaid and some of the money needs to be sent back.

“If the person sends money back, not only will they be out the money they sent, but any fees the bank will charge for the false check,” reported Fox6 in Milwaukee, Wis. 5

People are often contacted through the information the fraudsters find online. For instance, the targeted victim interviewed by Fox 6 who saw through the scheme said he had posted his information on Craigslist.

Watch Over Your Digital Shoulder

According to industry expert Frank Abignale, the subject of the 2002 movie "Catch Me if You Can", technology has made fraud so much easier than it was decades ago when he committed fraud. He says social media use often provides thieves most of the information they need, doing as much as 98 percent of the work for schemers.

"If on your Facebook page you happen to tell me where you were born and your birthdate, then I’m 98 percent of the way to stealing your identity," Abignale said in a May 2015 interview with the Star Tribune in Minneapolis. 6

[ Related reading: How Sharing Information on Facebook Can Lead to Identity Theft ]

Social sharing
Credit: Geralt/Pixabay (Public Domain Image)

It's a good idea to shred anything containing your personal information that comes via regular mail delivery too. Not only do people have to watch over their digital shoulders these days, they still have to worry about good old-fashioned dumpster divers as this trend has not gone out of style. Always shred bank information, unused or old checks too.

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In 2009, the LA Times reported the Consumer Federation of America estimates "one of every three adults has been approached by someone offering a fake check at one point." About two percent of those individuals are ripped off by $3,000 to $4,000. 7

The above are some of the most common scams, however it is important to keep in mind that swindlers continue to devise new ways to scam people out of money, and vigilance, common sense and caution are always a good approaches when faced with these decisions.

As the adage says, if it sounds too good to be true, it usually is. A generally good philosophy to follow when it comes to avoiding fraud.

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Known as one of the industry's best experts in preventing check fraud and identity theft, Frank Abagnale has been working with the FBI and doing consulting work for decades.


Dec 30, 2015 2:44pm
It's amazing just how much of this crap is going around. Can't help wondering if this is what all of the stolen info from credit cards and store cards has been about over the past couple of years.

The latest one that's trying to work me tells me that I've been listed as a reference on my son's account (they have his name, but my phone number?) and could I please have him call them immediately. Hmmm. You don't have his number? I don't think so. LOL.
Jan 4, 2016 4:09am
Amazing what tricks they'll try! I think you're right and those data breaches are leading to more scams.

I've stopped answering my phone. One I have run into a few times is people pretending to be contractors, etc. I think these scammers are spoofing local numbers. The one I did answer and ended up hanging up on, I looked up the number and also the reverse. That scammer used one person's name and a different person's phone number/address (both locals, neither listed as a business).

A couple of months ago my own phone number even called me LOL.

Thanks so much for commenting and sharing your experience.
Jan 29, 2016 8:57am
What a great read. I'm in the tax business and it's amazing the lengths people will go to gain access to your personal information. Someone will call a vulnerable person (typically the elderly) and pretend to work for the IRS and demand payment or jail time. Some folks actually send money. Thanks for the tips.
Jan 29, 2016 3:47pm
I've heard of the jury duty scam and how they really try to scare people. Terrible so many scams continue to go around. I bet you see a lot in your industry! Thanks Gorman35, appreciate your comments.
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  1. "FAQs (check scams)." FakeChecks.org. 27/12/2015 <Web >
  2. "Avoid Fake Check Scams: Five things you should know." National Consumer League. 27/12/2015 <Web >
  3. "Fake checks: The nanny or caregiver scam." Federal Trade Commission. 13/01/2015. 27/12/2015 <Web >
  4. "Fake Checks." Federal Trade Commission. 27/12/2015 <Web >
  5. "“Don’t be stupid!” Check scam could cost you thousands!." Fox 6. 30/03/2015. 27/12/2015 <Web >
  6. "'Catch Me If You Can' subject Frank Abagnale says identity theft getting easier." Star Tribune. 13/05/2015. 27/12/2015 <Web >
  7. "Beware of fake-check scams." LA Times. 31/05/2009. 27/12/2015 <Web >

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