Suppose you're selling a high-ticket item and the shopper doesn't want to use a money order to pay. You don't take credit cards, and a personal check isn't an acceptable form of payment either. The payment solution is a cashier's check. But is that always the safest?
Cashier's check fraud is around. You might think you're getting a legitimate cashier's check only to discover that you're another victim of fake check scams. How can you protect yourself? What's the best way to identify any fraudulent cashier's checks?
Video of the Day
How Can I Tell if a Cashier’s Check Is Authentic?
Contact the issuing bank or credit union if someone pays you and you suspect that it might be a fake cashier's check. The bank name will be on the cashier's check, and you can get their phone number and call to verify the validity of the cashier's check.
Make sure you don't take the financial institution's phone number off the check. It could be a fake. Instead, research the issuing bank and get the phone number from a neutral source.
Once you have the correct phone number and call, the financial institution will need the routing number that's on the cashier's check.
You can also visit the local branch of the issuing bank or credit union and show them the cashier's check. If the financial institution says that they haven't issued it, it's a fake cashier's check.
How to Spot a Fake Cashier’s Check
Sometimes a scammer may give you a cashier's check and will want your product or goods quickly. And although you should still call the issuing bank or credit union, there are some ways to see if there are any red flags.
Note the amount of the check. Do the words match the number amount? Is the payment amount of the check larger than what you had agreed upon? A scammer will often write an overpayment, so you will provide them with the difference before you try to cash the fake cashier's check.
All financial institutions have watermarks on their cashier's checks. So check for watermarks on all cashier's checks given to you. If they don't have them, they're probably fraudulent cashier's checks.
A shiny account number is also indicative of a fake cashier's check. And the signature should be smooth, not shaky.
Common Cashier’s Check Scams and How to Avoid Them
There are several common scams that use fake cashier's checks. When receiving a cashier's check, be wary of doing anything before you know that you're not the victim of a fake check scam. Here are some common fake check scams that the U.S. Office of the Comptroller of Currency have found.
Foreign Lottery Check Scams
You may have been notified that you won a foreign lottery or some distant relative died. The bottom line is that you're told you have inherited a lot of money. The letter will come with a cashier's check, with you as the payee.
The cashier's check is to cover taxes and fees relating to the windfall. You are told to send the taxes and fees back using the cashier's check. You send the money back, but then the fake cashier's check doesn't clear.
Mystery Shopper Check Scams
You might be chosen as a mystery shopper. A cashier's check is given to you, as the payee, to deposit in your bank account. You are asked to buy merchandise, keep some money for yourself and then send the rest to a third party. But the check bounces, and you're out the money you sent back and spent.
Overpayment Check Scam Prevalent
One of the most common scams is the overpayment scam. The shopper gives you a cashier's check with the amount of the check higher than the agreed-upon price. They then ask you to refund them the difference.
You give the refund, and after two weeks, the bank tells you that the cashier's check has bounced. You're out the money you refunded and the goods.
What Happens if I Cash a Fake Cashier’s Check?
You can cash a fake cashier's check; the problem is when the check bounces. For instance, a bank or credit union has funds availability for a deposited cashier's check within one business day. So you receive the funds quickly.
But it takes two weeks for a cashier's check to clear. If the check bounces, your financial institution will recover the funds from you. In other words, you must give the money you withdrew back to the bank or credit union.