Check Fraud refers to a category of criminal acts that involve making the unlawful use of one or more checks or checking accounts in order to illegally acquire or borrow funds that do not exist within the account balance or account-holder’s legal ownership. Most methods that are used by the violator involve taking advantage of the float (the time between the negotiation of the check and its clearance at the check-writer’s bank) to draw out these funds.
Have you ever received a letter, email, or telephone call from a stranger that started something like:
You’ve won the lottery! Now, just wire us some money.
Help us transfer funds to the U.S. and you’ll be rewarded.
We are an international corporation and need your assistance. All you have to do is clear checks through your account, wire us the money, and take a percentage for yourself.
You've inherited money from a relative you don't know.
You are selling something and the potential buyer sends you more than the asking price.
Beware! This is how a typical fraud scheme might start. They lure you in with a get rich quick proposal. The only one who gets rich is the person behind the scheme. If you accept checks or wires into your account and they are fraudulent, you will lose not only your money but could be subject to criminal prosecution. Keep the following in mind the next time you receive that get rich quick proposal from a stranger.
- Be wary of any offer that sounds unreal or too good to be true. It usually is.
- Be suspicious of any offer that requires you to wire money, withdraw cash from your account, or provide account information.
- Verify any calls or emails that you receive about a security or fraud investigation with your bank or financial institution.
- Be wary of telemarketers who want to “draft” your bank account. Do not provide your bank account or personal information over the phone to strangers.
- Be wary of any individual that approaches you outside the bank or in the parking lot and needs you to withdraw money from your account for any reason.
Other things you can do to protect yourself:
- Review your accounts regularly using Online Banking. The sooner fraud is detected, the lower the impact. With Online Banking, you have time on your side because you can view your account daily, and immediately notice any irregularities. You can also set up email alerts that notify you when your account hits certain levels. Online Banking also removes the additional risk of mail fraud.
- Monitor your credit report annually. Look for any new accounts that may be opened that are not yours and alert the credit bureau with any suspicious information.
- Be alert for any irregularities. Did you not receive a bill or statement? Are there unexpected charges on any of your accounts, or charges from unknown vendors? Are there posted checks that are out of sequence? Have you been denied credit for reasons that don't match your financial profile? Are you getting calls from creditors or debt collectors about bills you know nothing about? When you see something unusual, check it out.
- Stay current with the latest fraudulent activities—online and off.
If you would like to know more about Check Fraud or how to protect yourself against Check Fraud, check out this page from the Federal Trade Commission (FTC).
Another excellent resource is the National Consumers League (NCL), the nation's oldest nonprofit consumer organization and a central source of information and advice about fake check scams. NCL works in collaboration with the Alliance for Consumer Fraud Awareness, a coalition of consumer and business organizations, government agencies, and companies that are committed to fighting fake check scams.
Other useful links: