Check Fraud is one of the biggest drains on corporate America every year. It literally fleeces small businesses, which is why so many turn to Check Issuing as their third party check disbursement service.
But cashier’s check fraud is also huge stuff. While cashier’s checks are viewed by banks as “risk free,” this just isn’t always the case. Many consumers become victims of cashier’s check fraud every day. But there is a lot that you can do in order to prevent this type of fraud and The US Department of Treasury has some great tips for us.
This OCC Consumer Advisory on Avoiding Cashier’s Check Fraud gives you information on some common scams and some steps you can take to avoid becoming a victim. Although this advisory focuses on cashier’s checks, you may find the information useful if you transact business using other official bank instruments, such as money orders and official checks.
Common Scams – Each scam involving a fraudulent cashier’s check may be different, but some of the more common scenarios are:
Selling goods – You sell goods in the marketplace – for example, over the Internet. A buyer sends you a cashier’s check for the price that you have agreed on, and you ship the goods to the buyer.
Excess of purchase price – This scenario is similar to the one described above. However, the buyer sends you a cashier’s check for more than the purchase price and asks you to wire some or all of the excess to a third party, often in a foreign country. The buyer may explain that this procedure allows the buyer to satisfy its obligations to you and the third party with a single check. The cashier’s check turns out to be fraudulent.
Unexpected windfall – You receive a letter informing you that you have the right to receive a substantial sum of money. For example, the letter may state that you have won a foreign lottery or are the beneficiary of someone’s estate. The letter will state that you have to pay a processing/transfer tax or fee before you receive the money, but a cashier’s check will be enclosed to cover that fee. The letter will ask you to deposit the cashier’s check into your account and wire the fee to a third party, often in a foreign country. The cashier’s check turns out to be fraudulent.
- Mystery shopping – You receive a letter informing you that you have been chosen to act as a mystery shopper. The letter includes a cashier’s check, and you are told to deposit the check into your account. You are told to use a portion of the funds to purchase merchandise at designated stores, transfer a portion of the funds to a third party using a designated wire service company, and keep the remainder. The cashier’s check turns out to be fraudulent.
For more information, visit our main page about preventing check fraud: