How Fake Check Scams Work and What to Do

A fake check scam is a common financial fraud where criminals exploit individuals by having them deposit counterfeit checks. Victims often believe they have received legitimate funds, only to discover the check is fraudulent after sending money back to the scammer. This type of deception is widespread and can lead to significant financial losses, often amounting to thousands of dollars. Understanding these scams is important for protecting personal finances.

How the Scam Unfolds

The typical fake check scam begins with a scammer sending a check to a victim, often for an amount greater than what was expected or agreed upon. This overpayment is central, as the scammer then requests a portion of the money be returned or forwarded to a third party. Common pretexts include overpayment for items sold online, lottery winnings, mystery shopping assignments, or advance fees for supposed jobs or services.

A key aspect enabling these scams is “check float,” also known as availability float. This refers to the time delay between when a check is deposited and when the funds are fully collected and verified from the issuing bank. While federal law often requires banks to make deposited funds available quickly, usually within one to two business days, this does not mean the check has genuinely cleared. Initial availability simply means your bank has provisionally credited your account, creating a window for the scammer to act before the check’s true legitimacy is confirmed.

Scammers pressure victims to send money back quickly, often through irreversible methods like wire transfers, gift cards, or cryptocurrency. They know it can take days or weeks for a bank to discover a check is fraudulent and reverse the deposit. Once the fake check bounces, the victim’s bank will debit the full amount of the counterfeit check from their account.

The victim is held responsible for the entire amount withdrawn or transferred, plus any associated bank fees, such as overdraft charges. Money sent to the scammer is almost impossible to recover, leaving the victim with a significant financial loss. This mechanism exploits the banking system’s provisional crediting of funds, making individuals bear the financial burden of the fraud.

Common Red Flags

Several indicators can help identify a fake check scam. A prominent red flag is receiving a check for an amount greater than expected, especially when accompanied by a request to send back the difference. Unsolicited checks, such as those for lottery winnings or sweepstakes you never entered, are also strong warning signs.

Pressure to act quickly, often with demands to deposit the check and send money immediately, is a common tactic used by fraudsters to prevent victims from verifying legitimacy. Instructions to send money via methods difficult to trace or reverse, such as wire transfers, gift cards, or cryptocurrency, should raise immediate suspicion. Legitimate transactions rarely demand such payment methods.

Communication itself may contain red flags. Poor grammar, spelling errors, or unusual phrasing in emails or letters accompanying the check can indicate a scam. If the purported payer claims to be in a different country or unable to use standard payment methods, this often signals fraudulent activity. The physical appearance of the check can also be suspicious, exhibiting signs like poor printing quality, misspellings, or an incorrect bank name or logo. Inspecting for irregular perforations, missing check numbers, or incorrect routing codes can also help.

What to Do

If you suspect a fake check scam, take immediate action. Before depositing any suspicious check, verify its legitimacy directly with the issuing bank. Locate the bank’s official phone number from its website or a reliable source, not from the check or sender. If the bank cannot confirm the check’s validity or the situation remains unclear, do not deposit it.

Report suspected scams to the appropriate authorities. File a complaint with the Federal Trade Commission (FTC) at ReportFraud.ftc.gov. For scams involving mail, contact the U.S. Postal Inspection Service (USPIS). Reporting helps these agencies track and investigate fraudulent activities.

If you have already deposited a suspicious check or sent money, contact your bank immediately. They may be able to stop payment on funds not yet transferred or offer guidance. Understand that you will likely be held responsible for the funds once the check is identified as fake. Avoid spending more money from the deposited check or sending additional funds to the scammer. Document all communications and transactions related to the scam; this information will be useful for investigations and your bank.