NDSU Extension Service - Ramsey County

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Is it a Check or Not?

Is it a Check or Not?

 

       Thanks to new and better home printers and the ever expanding Internet, there has been an explosion in the number of counterfeit personal and business checks, cashier's checks and  money orders in recent years  It looks like a check, it feels like a check but if you deposit it does it act like a check? ,

       The most common scenario with a fraudulent check is that a consumer deposits a check from a stranger, withdraws the funds and then sends a portion of the money to the stranger before their bank discovers that the check was fraudulent.

        In these cases, the depositor most likely will be held responsible for the entire amount of the fraudulent check. Why? Because by depositing the check and withdrawing money, the consumer is taking responsibility for the funds that have been spent or sent before the check is found to be worthless. And often the withdrawal cannot be cancelled or reversed, especially with wire transfers, in which funds are transferred out of the account immediately.

       Money isn't the only thing that can be lost to a fake check scam. In one example reported to the FDIC several years ago, a person "sold" a classic car then worth $41,000 to a scam artist who used a counterfeit cashier's check.  Important reminders when depositing any check include:

      If you deposit a check from a stranger, discuss the situation with staff from your financial institution before spending that money or handing over anything of value. It's safer not to accept checks from strangers, but if you do, tell your financial institution about the circumstances surrounding the check and ask when the check is likely to be considered "good" (paid).

      While federal regulations require institutions to make funds from a deposit available quickly – generally within one to five business days – it can take a couple you at any time about waiting, especially if you are directed to of weeks or longer before the bank discovers that the deposited check is worthless.

      Walk away from any deal if you receive a check for more than the amount due and you're instructed to return the difference. Let's say you sell a $5,000 item over the Internet and the buyer sends a check or money order for $10,000. The buyer, who has an explanation why the check is for more than what you expected, instructs you to deposit the check and wire the excess amount to his account or to the account of an associate. It may take a couple of weeks, but eventually the check will be returned as counterfeit.

     Recognize other warning signs of a check scam. The reasons for receiving a check are suspicious. You're asked to send money outside of the United States. You're pressed to send money right away. You're warned to keep things quiet – to not discuss the deal with a bank employee or anyone else.  All are red flags to leave that  “too good to be true”deal on the table.

 

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