CASHIER’S CHECKS – DON’T BE A VICTIM!

In my last post, I presented an overview of the types of fraud that currently are being perpetrated using Cashier’s checks. In this post, I will provide my recommendations on how to best protect yourself from this type of fraud. Since a cashier’s check is designed to be issued by a banking institution, many people automatically trust the paper it’s printed on without a second thought. But advanced printers and clever scammers have proven that such blind trust can be a costly mistake.

Sadly, it can be difficult to figure out if a cashier’s check is counterfeit or not. In fact, your bank may not even know until the other bank returns it as unpaid and this could easily take weeks to be discovered. Today’s con artists do everything they can to make the check look as authentic as possible in order to delay the detection.

Protect Yourself

But there are ways you can protect yourself from becoming a victim of cashier’s check fraud. Some important things to keep in mind are:

·        Don’t do business with strangers. While it’s not always possible to know each person with whom you engage in business relations, it’s best to be cautious about accepting checks from individuals you don’t know. If you enter a business deal with someone you’ve never met before, make the effort to verify information about the buyer from an independent third party.

·        Consider escrow services or online payment systems when selling goods or services. When you use escrow systems or processing services such as PayPal, the money is then held until it clears. So you have an extra layer of protection from fraud. However, there are escrow services that scam people as well. Also, the online payment system can include expensive fees. That’s why it’s crucial to be careful and do your research.

·        When accepting a cashier’s check, be suspicious if it is for more than your selling price. The key to a majority of these scams is that you’re expected to wire an excess amount of money to a third party. So it’s logical to wonder why a complete stranger would provide you with funds that are the property of someone else. This should immediately serve as a warning.

In general, if you receive correspondence of any kind that claims you’re entitled to a large sum of money and you only owe a small fee, that’s a red flag. The rule of thumb should always be that if something seems too good to be true, it probably is a scam.

If you choose to do business with someone who offers you a cashier’s check, remember to save every document associated with this transaction. The paperwork may be very valuable if a problem with this deal surfaces down the line.

Caution and good sense are important whenever you enter into any business deal. So don’t jump into a transaction that involves a cashier’s check until you have thoroughly investigated every detail. Otherwise, you could be left owing a large sum of money and possibly losing an expensive product to scammers in the online marketplace.

As a final matter, remember that the best way to avoid becoming a victim of Cashier’s check fraud, is to only conduct business transactions in which all funds are delivered to your bank by a wire transfer. Wire transfers are cash and essentially fraud-proof.

Cashier's Checks - Not Always Good as Gold

In today’s digital age, many transactions are now being done on the Internet. For this reason, my colleagues and I in the legal community have noticed that online fraud cases are on the rise. One of the principle forms of this type of financial deception involves the cashier’s check. Once considered a consistently trustworthy payment, cashier’s checks have become more questionable due to sophisticated scammers. This means a supposedly bank-issued check may not be as good as gold anymore.

 

It’s an unfortunate reality that cashier’s check fraud is a booming business for criminals both near and far. So I’d like to focus this blog on how you can protect yourself from cashier’s check schemes.

 

Types of Cashier’s Check Scams

 

According to the Office of the Comptroller of the Currency (OCC), there are a number of different cons that have been developed using cashier’s checks. These include:

• Online goods – If you have a product for sale online, a buyer sends you a cashier’s check for the ticketed price. Then you send the item to the buyer. You and your bank discover later that the check was fraudulent. Therefore, you lose both the product and the money you charged for this item.
• Purchase price and more – This scam is similar to an online goods sale except that the buyer sends you a cashier’s check in an amount that is more than your advertised purchase price. As a result, the buyer requests that you send the excess money to a third party, which could be located in a foreign country. After you follow these directions and wire the money as instructed, you learn that the check has no monetary value.
• Lottery win or legal settlement – You receive a letter stating that you’ve won a foreign lottery or you have the legal right to some kind of substantial settlement. The letter explains that in order to get this money, you need to pay a processing fee or transfer tax. However, the enclosed cashier’s check will cover that amount. All you need to do is deposit the check and wire the designated funds to a third party. In the end, that cashier’s check is worthless.
• Mystery shopping payment – A letter is sent to you that explains you’ve been selected to be a mystery shopper. With the enclosed cashier’s check, you’re asked to use a certain sum to buy merchandise and transfer another portion to a third party. The rest of the monies are yours to pay for your services. After depositing the cashier’s check and wiring the designated amount, you learn that you’ve been scammed.

In each one of the above scenarios, the fake cashier’s check will be returned to your bank as unpaid. Therefore, the amount of this check will be deducted from your account. If you don’t have the funds, the bank will go after you for the cashier’s check amount. The inevitable conclusion is that you will lose the goods that you sold, if that was the set-up, the funds that you sent to a third party or both your property and the wired money.

 

In my next post, I'll discuss how you can avoid becoming a victim.