Check Scams…..What you need to know

[ 0 ] August 28, 2013 |

Over the past month I witnessed three different members lose money to the same scam while trying to sell something.  This common scam has been around for decades and over the years has been referred to as the “eBay scam”, “craigslist scam”, and the “overpayment scam”.  Most of the times the scam goes something like this:

  • I, mild mannered nice guy, put something for sale on some sort of “ye old trading post”.
  • Very friendly con artist offers to buy my item.
  • Friendly con artist provides a cashier’s check, money order, bank check, personal check for more than the purchase amount and provides some reason why this is the case.  Reasons I have heard over the years: My bank made the check for the wrong amount”, “The check includes the shipping/taxes/transit for the item”, “It includes installation”, etc
  • Friendly con artist asks me to wire the excess funds back to him after I deposit the check, since I am a mild mannered nice guy, I comply.
  • Check provided by con artist, bounces, and there is no way to get those excess funds back.

While many of you may think you would never fall for something like this, it is hard to identify a legitimate buyer from a con artist.

  • Many times the con artist will appeal to a buyer’s greed by not negotiating or even over-paying for any “inconvenience”.
  • The checks they hand you can be flawless and look exactly like a real cashier’s check from a bank.  The checks will have accurate routing and account numbers for an actual account with sufficient funds to make good on the check.  We have had checks come in that we have inspected, researched, and even called on go bad on us.  Professional inspection of a check won’t tell you if it will bounce.
  • They let you hold on to the item you are selling, so you don’t feel like you are taking much risk.  You just deposited a check for $15,000, sent him $1,500 and still have the car so you feel pretty safe with $13,500 and the vehicle.  The con artist does not want your car, they want the $1,500.  In reality, you are right where you started when you put the car up for sale, except $1,500 poorer!

So how do you avoid becoming a victim?

  1. Never accept a check for more than the selling price.  No matter how reasonable the story or “great” the deal is, the funds should match the purchase price.
  2. Never send funds back to a buyer.  If the buyer insists you wire funds back to them for any reason, you should assume the transaction is a scam.  Remember, the con artist is usually after your money, not your item for sale.
  3. Cash is king.  Get the purchase in cash if possible.  If the purchase price is high (like for a vehicle) ask for a portion in cash and a portion in cashier’s check.   You could also consider an escrow or online payment service that will make sure funds are good prior to releasing your items for sale.
  4. If you have to take a check, have your financial institution research the check before depositing.  While this option is not foolproof, many times they have resources and experience that can help identify a scam.

If you want to learn more the Federal Trade Commission has more information and some additional tips. ( Don’t be another “mild mannered nice guy” and make sure you protect yourself next time you sell put something up for sale!


Tags: , , , , , , , , ,

Category: Technology/Security

About the Author ()

Nick Sosnowski has been with IAACU since 2001 and in the banking industry since 1996. Nick has had a variety of roles throughout his banking experience including in Lending, Credit and Debit card management, and Fraud prevention, and financial management.

Leave a Reply

Time limit is exhausted. Please reload CAPTCHA.