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Counterfeit Check Scams
Over the past several years, US citizens have been bombarded by mail, email, phone calls, and faxes from unscrupulous individuals in other countries who seek to defraud them. There has been an epidemic of counterfeit check fraud in this country that has affected hundreds of thousands of victims and cost them countless millions of dollars.
While the scams all have their individual twists and stories, they all seem to boil down to the same basic scenario which is "I'll send you a check, you cash it and wire some of the money to me and keep some for yourself." The problem is that the check turns out to be a fake; however, by the time the victim discovers that the check is fraudulent they have already wired the scammer's portion of the money. The victim is then left to deal with the responsibility of the bad check that they have cashed while the scammer sits safely outside the US without worry of being arrested or held accountable for their actions.
The following information is provided as a guideline as to what these schemes usually involve but keep in mind, they change and evolve as people become educated to how they work. If you believe that you are being contacted by someone who is trying to scam you, contact your local police. If you have received a check, money order, or travelers check that you think may be fraudulent take it to your bank and explain the situation to them, chances are they have seen other customers with similar circumstances and will do everything they can to help you.
Common Scenarios Where Consumers Receive Counterfeit Checks
Nigerian 419 Scam - This is the original scam from which all the others have developed. This scam involves the victim receiving a letter, fax, or email from someone claiming to be a high level government official from a foreign country, commonly Nigeria. Sometimes they claim to be the wife of a high-ranking government official that has died or been killed. The individual tells the victim that they have a large sum of money, often from a US contract with their country that they and their associates would like to invest in the United States. They seek the assistance of someone with a US bank account to assist them to get the money into the country in exchange for a percentage of the money. If the victim agrees to help, they will be asked to wire money to pay expenses or to bribe officials to release the money. If the victim does not have the money, they will often be sent a check that they are instructed to cash or deposit and then wire the money (usually via Western Union or Money Gram). Of course the check is counterfeit, and comes back after the money has been wired. This scam can escalate to huge sums of money if the victim wires the "bribe money" from their own funds. This signals that the victim has money and can likely deposit a larger check without raising suspicion.
Inheritance Scam - This scam evolved from the original 419 scam and has many of the same characteristics. As in the 419 scam, the victim receives a letter, fax, or email from someone overseas, but this time they are writing to inform the victim that a long lost relative has died or been killed. The departed relative has substantial assets in the foreign country that they have left to the only surviving heir, the victim. From here the scam follows the 419 scenarios as attorney fees and such must be paid to claim the inheritance. If the victim does not have the means to pay the fees, they are put in touch with someone who will loan them the money. The loan comes in the form of a counterfeit check. Again, these scams have the potential to evolve into very large sums of money.
Internet Auction Scam - Everybody loves online auctions, including the scammers! This scam evolved from the 419 scam, but because it involved lower dollar amounts and newer technology had a much higher percentage of success for the scammer. In this scam, the victim places an item for sale on the Internet (either on national or local auction or classified ad websites). The winning bidder or prospective buyer contacts them to arrange payment, but there is a catch. The buyer is overseas and shipping needs to be arranged. Payment is sent in the form of a counterfeit check for an amount in excess of the purchase price. The buyer is asked to wire the excess money to the buyer's shipper who will arrange pickup of the item (they are often told that there is a little extra money for them to keep for their trouble to sweeten the deal). The money is wired before the check comes back, leaving the victim out the money.
A variation of this scam involves the scammer putting up a highly desirable item at an unbelievable price. The victim wins the auction, wires the money, and never receives the merchandise. The scammer will often provide the victim with fake documents insuring that they will be reimbursed by the online auction site if anything goes wrong.
Lottery/Sweepstakes Scam - This is now the most popular of the counterfeit check scams, probably because of the high level of success that the scammers have had with it. The victim will receive a letter or email notification informing them that they have won a lottery or sweepstakes. Originally it was either the Canadian Lottery or the El Gordo Lottery in Spain; however, now they are using any manner of sweepstakes or lottery including some very popular US lotteries and sweepstakes. The victim is given a counterfeit check to finance the taxes and fees associated with collecting the "prize". They are asked to cash or deposit the check and wire the money to an individual who is collecting the "tax" or "fee" that must be paid to receive the prize. The reason this is so successful is that it plays on an American dream. Also, most times there is a contact phone number that the person can call. Of course it is the scammer himself on a non-traceable cell phone who is safely outside the US. The victims are also told not to disclose their good fortune until they collect their grand prize. The scammers have seemingly plugged all of the holes in their other scams with this one and it is very successful. In some cases the victim will have previously "signed up" online or responded to an email to play a foreign lottery or sweepstakes prior to receiving the letter notifying them of their winning.
Work From Home Scam - Another very effective counterfeit check scam is the work from home scam. In this scam the scammer places ads on job search sites or replies to those who post job wanted ads. Once hooked up with a victim, the scammer gives the details of the work. The scammer claims to be a foreign company that needs assistance in collecting their accounts receivable from their US clients. All the victim is required to do is receive checks, deposit them, keep a percentage for themselves, and forward the rest of the funds via wire to their "employer". Obviously the checks are counterfeit and the victim is left holding the bag for the bad checks.
Mystery Shopper Scam - A variation on the work from home scam in which the victim is to be a "Mystery Shopper" for several national companies. They are sent a counterfeit check and instructed to use the funds to complete several transactions, the largest of which is a Western Union wire transfer, and evaluate the service they receive. Of course the wire is sent to the scammer and the customer is left stuck with the bad check. This scam puts some pretty tight time frames for completion of the transactions and urges the victim to keep their assignment secret from everyone. Charitable Organization Scam: - This is where the scammers sink to some of their lowest levels. They will surf the message boards of Christian organizations and gain the trust of an unsuspecting victim. They will claim to be a born again Christian who has a large sum of money that they want to donate to a Christian church or organization. From here it evolves into the 419 scam where money is needed to get the donation into the US.
Lonely Hearts Scam - This is one of the saddest of all of the counterfeit check scams. In this one, the scammers surf personal ads or matchmaking websites for unsuspecting victims. They befriend someone and become involved in a cyber relationship. Once the victim is hooked, the scammer says that they want to come to the US to be with them. They ask for money to fly to the US and if the victim cannot or will not send it, they are sent a counterfeit check from a "relative" of their overseas companion which they are asked to cash and forward to them for a plane ticket.
Types of Counterfeit Checks
There are many different kinds of "checks" involved in these scams, below are just a few examples of what are commonly used.
Washed or Altered Checks - This is how the original scams were conducted. The scammers would get canceled checks from legitimate US bank accounts and use simple chemicals to wash away the original payment information and the cancellation stamp. Sometimes they would actually just erase the information from the front of the check with an ink eraser. These were fairly easy to detect and were usually a long shot for the scammer.
Counterfeit Cashier's Checks and Money Orders - With the increasing availability of cheap PC's, printers, check printing software, and check stock counterfeit checks took a huge leap forward. Now scammers are not reliant on making alterations to an existing check, they can print their own. If you are going to print your own checks, why not make them cashier's checks or money orders? These items have maximum hold periods mandated by the government that are far too short for the checks to clear, meaning that the funds have to be made available to the victim before the checks can be returned. The scammers know this and use it to their advantage, as well as the fact that many Americans still believe that cashier's checks and money orders are as good as cash. These checks can usually easily be verified by calling the bank on which they are drawn. To counteract this, the scammers have actually started placing their own phone numbers in place of the bank's phone number on the checks!
Counterfeit Company Checks - These checks are a little bit trickier to deal with and are becoming more common as cashier's checks are being scrutinized more. They are checks that appear to come from legitimate US companies ranging from furniture manufacturers to insurance companies. The checks usually contain the actual routing number and account number of the company's real bank account, so if you call the bank to verify the check they may tell you that the check is good. The only way to actually verify these checks were actually issued by the company is to track down the actual phone number of the company and speak with their accounts payable department. Again, don't rely on numbers printed on the check or supplied by the scammer or victim.
Counterfeit US Treasury Checks - These are less common as they are a bit trickier for the scammer to pull off, but not impossible. The treasury has a toll free number 1-804-697-2605 to verify treasury checks.
Counterfeit US Postal Service Money Orders - These items are easy to pick out if you compare them to a real US Postal Service Money order. You can take them to a local post office to verify or compare the security features to that of a genuine money order. The US Postal Service will also verify their money orders at this toll free number 1-866-459-7822.
Canadian or International Checks - Be very careful with checks that are drawn on Canadian or foreign banks that are not payable through a bank in the US. Checks that are payable through Canadian or foreign banks are not subject to US banking regulations and can take over a month to be returned. The only way to safely accept these items is to have them sent to the Canadian bank for collection. This involves mailing the item directly to the bank and requesting guaranteed funds in return.
Counterfeit Traveler's Checks - These are slightly less common than other counterfeit items because they are difficult to create. Because there are so many different kinds of traveler's checks available, it is difficult if not impossible to verify that they are legitimate. If you do attempt to verify them, make sure that you obtain the phone number independently and don't rely on a number provided by the sender.
Some Things to Look For On Counterfeit Items:
It can be difficult if not downright impossible to distinguish a counterfeit check from a genuine check, even for an experienced bank employee. Below are some things that may tip you off to the fact that a check is counterfeit.
Signatures on counterfeit items can often be a tip off. English is not the first language of most of these scammers and they are not comfortable printing or writing without the aid of a computer. Signatures may often be printed on the check from a scanned copy of an American signature. These will often have a "digitized" look to them. If the item is signed by hand, the signature may appear scribbled, be illegible, and may contain many up and down pen strokes.
Prominent phone numbers printed on the face of the check may be there to bait the victim or the bank into calling the number to verify the check. Often the phone numbers go directly to the scammer.
Counterfeit checks often come to the victim via Fed EX or UPS overnight. If they come in the mail, they often will have Canadian postage stamps or cancellations. If Nigerian postage is on the envelope, you can be assured that you have a counterfeit. Scammers sometimes will get around this by sending the check to a third party in the US to be forwarded to the victim.
Sometimes the victim will provide their account information to a scammer in order to receive a wire transfer. The scammer will then send a counterfeit check via Fed EX or other overnight service to a branch office of their bank with a letter to deposit the check to the customer's account. When the customer checks their balance, they believe they have received the wire and move forward with the scam.