How to Identify and Protect Yourself Against Fake Check Scams

Oct 15, 2019
How to Identify and Protect Yourself Against Fake Check Scams

For those working from home, or anyone looking for extra work, the enticement of a quick and easy paycheck can seem too good to be true. Unfortunately, the answer is that is usually is, and the increasing number of criminal fake check scams aim to target individuals that are already in desperate financial situations.

We take fraud very seriously at Checkeeper, and we constantly monitor for fraudulent activity to ensure the security of account holders. The Federal Trade Commission (FTC) has laid out some very helpful details to assist with spotting and reporting fake check scams. FTC Consumer Education Specialist, Colleen Tressler, expounds heavily on this subject in her 2018 article, "Anatomy of a Fake Check Scam." (read the full article, here).

Fake checks drive many types of scams – like those involving phony prize wins, fake jobs, mystery shoppers, online classified ad sales, and others. In a fake check scam, a person you don’t know asks you to deposit a check – sometimes for several thousand dollars and usually for more than what you are owed – and wire some of the money back to that person. The scammers always have a good story to explain the overpayment – they’re stuck out of the country, they need you to cover taxes or fees, you need to buy supplies, or something else. But by the time your bank discovers you’ve deposited a bad check, the scammer already has the money you sent, and you’re stuck paying the rest of the check back to the bank.

How Does It Happen?

Another excellent article from the Federal Trade Commission details not only the most common types of scams, but their insidious methods, as well. (full article, here) Below, are two regularly seen scams, and how they operate.

The "Overpayment"

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.

The "Secret Shopper"

In secret shopper scams, the consumer, hired to be a secret shopper, is asked to evaluate the effectiveness of a money transfer service. The consumer is given a check, told to deposit it in their bank account, and withdraw the amount in cash. Then, the consumer is told to take the cash to the money transfer service specified, and typically, send the transfer to a person in a Canadian city. Then, the consumer is supposed to evaluate their experience — but no one collects the evaluation. The secret shopper scenario is just a scam to get the consumer’s money.

Con artists who use these schemes can easily avoid detection. When funds are sent through wire transfer services, the recipients can pick up the money at other locations within the same country; it is nearly impossible for the sender to identify or locate the recipient.

Avoid Becoming a Victim

The FTC gives this advice on how to spot and avoid check scams:

Have you been a target?

If you think you’ve been targeted by a counterfeit check scam, report it to the following agencies:

Checkeeper does not tolerate fraud. If you have any questions about fraud or fraud prevention in connection with Checkeeper or its services, please contact us at