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Protect Yourself against Fraudulent Checks

A rule of thumb is to only accept checks from a company or person you know and trust. There are a number of fraudulent check schemes that you should be aware of:

  1. When someone buys something you advertised for sale
  2. When someone pays you to work at home
  3. Gives you an advance on a sweepstakes win
  4. Gives you the first installment if you agree to transfer money to a foreign country

A common example is what's known as the "cashier's check scam". In this scam, a consumer advertising an item for sale receives what looks to be a legitimate cashier's check for more than the sales price from a buyer, and is asked to deposit the check into the seller's account, then wire some of the "excess" to a third party the seller does not know.

It may take weeks or even months for the counterfeit cashier's check to come back to the customer's bank unpaid, especially if the check is drawn on a bank outside the U.S. These scams are also run with counterfeit money orders and treasury checks.

Understand that while most checks are "available for withdrawal" quickly, as a depositor, you are responsible for checks and money orders you deposit. If a check you have deposited is returned to your bank unpaid (it "bounces"), and you have already withdrawn the funds, your bank has the right to obtain reimbursement from you. You are responsible for any loss. The best thing that you can do to protect yourself is to accept checks only from people or entities that you know.

If you are concerned about a check, contact the National Fraud Information Center at www.fraud.org or 800-876-7060. Remember, you are responsible for the checks you deposit.

 

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