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BBB reports fake check scams on the rise

The Better Business Bureau Serving Central Indiana shows examples of places on a check where people could look to determine if the check is fake if they receive one in the mail and the company asks for a portion to be returned.

By DARRELL SMITH - dsmith@newsexaminer.com

That check that came in the mail? Be suspicious if you don’t know the sender, weren’t expecting it or are asked to send back some money.

Police and the Better Business Bureau warn that people getting such mail should not respond except to report it to law enforcement.

Connersville Police in July reported a scam in which a local resident responded to an advertisement for secret shoppers. The person tried to cash a check from the secret shopper group that the bank determined fake. The bank charged the victim’s account for processing the check.

The BBB Serving Central Indiana said an in-depth study found 7 percent of all complaints filed with BBB’s scam tracker are for fake checks. That number has doubled in the past three years, during a time when people are using checks less often.

Most people do not call if they receive one of the scam calls or letters, said Carol McQueen, Connersville police chief.

A woman talked to her recently about receiving a cashier’s check but the woman figured it was a scam before sending money back to the person sending the check. The company she dealt with had an address in Illinois but the check came from New York. The company asked the woman to send the money back in iTune cards, which is what raised her suspicion.

“She actually got cash out of the cashier’s check,” McQueen said. “I told her to keep it because the bank might want it back.”

“The American Bankers Association recently did a study where they found that over one-fifth of the victims in 2016 were small businesses, so it’s not just individuals,” Tim Maniscalo, president and CEO of BBB Serving Central Indiana, said during a press conference. “There may be half a million victims each year. We found the largest group of victims are those in their 20s, although crooks do steal from all ages and all demographics.”

The ABA found that banks lost $789 million to fake checks in 2016. The U.S. Postal Inspection Service stopped $62 billion in fake checks from coming into the country in 2017, he said. Most of the checks come from Nigeria.

Many checks appear to be cashier’s checks, which the public trusts are guaranteed funds.

“That is not true,” said Andy Shank of Elements Financial. “They can be counterfeited just as easily as a personal check.”

He advised calling the issuing bank if the check appears to be suspicious. Sometimes the telephone call associated with the check comes from one area code, the bank is from a different location and the return address is from even a different location.

“There is no such thing as a free lunch,” he said. “If someone is trying to give you money, it is almost certainly a fraud scheme. The sad fact is when you deposit the check into an account, you are essentially vouching for its legitimacy. If the check is deposited on Monday, you get credit on Tuesday; up to 60 days after that, the check could come back out of your account if it was fraudulently issued.”

If selling an object, applying for a job or any other service and a check is received  for more than the value, it should be questioned, Shank said. The checks are usually in the $1,500 to $3,000 range because they are not large enough to initially raise red flags.

“If someone gives you a check or other financial instrument that asks you to send them any portion of the face value, you should immediately become skeptical regardless of the circumstances,” said Dan Taylor of the Postal Inspection Service. “If the request involves a third party, on overseas element or any kind of pressure to act quickly, stop in your tracks. Contact the BBB, Postal Inspection Service or any law enforcement agency for advice.”

Maniscalo said scams are generally well-organized and well-funded. He cited the scam that allegedly involves an Internal Revenue Service agent calling and demanding payment. When law enforcement raided the office in India where most of the calls originated, they found 700 people working there. 

Another scam is employment related where someone can work from home but they must purchase a piece of equipment, maybe a computer or software, and the company sends a check for more than the amount of the equipment, he said. The request is to send the money back in the form of a money gram or gift card. When the bank does not clear the check, the victim is responsible for the cost of the money sent back to the company.

McQueen said, “There are not that many reported, but I know it is happening. There are cases of callers asking for credit card information or asking for Social Security numbers.”

When the department receives a report, it is turned over the state attorney general’s office, she said. The attorney general keeps track and if there is a large amount of money involved, they could seek the restitution.