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- CommentAuthorVS
- said CommentTimeAugust 28th, 2007
Many consumers have become victims of scams involving a fraudulent cashier’s check.A cashier’s check is a check that is issued by a bank, and sold to its customer or another purchaser, that is a direct obligation of the bank.Cashier’s checks are viewed as relatively risk-free instruments and, therefore, are often used as a trusted form of payment to consumers for goods and services.
However, cashier’s checks lately have become an attractive vehicle for fraud when used for payments to consumers.Although the amount of a cashier’s check quickly becomes “available” for withdrawal by the consumer after the consumer deposits the check, these funds do not belong to the consumer if the check proves to be fraudulent.It may take weeks to discover that a cashier’s check is fraudulent.In the meantime, the consumer may have irrevocably wired the funds to a scam artist or otherwise used the funds – only to find out later, when the fraud is detected – that the consumer owes the bank the full amount of the cashier’s check that had been deposited.
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.The cashier’s check turns out to be fraudulent.
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.
Scams also may involve other types of checks.For example, the fraudulent check may appear to be written on the account of a real person or company or be written on an account that contains insufficient funds to cover the check.Other scams involve fraudulent postal service money orders or fraudulent money orders that appear to have been issued by a bank.
The result of these scams is that the fraudulent check will be returned unpaid.The bank will then deduct the amount of the check from your account or otherwise seek repayment from you, and you will lose either the goods that you sold, the money that you sent to the third party, or both.
See also:
Privacy, Fraud, and Scams: Cashier’s Check Fraud Part 2
10 Scams to Screen from Your Email: Part 1
10 Scams to Screen from Your Email: Part 2
Protecting Yourself From Identity Theft
Privacy, Fraud, and Scams: Fake Credit Report Sites
Privacy, Fraud, and Scams: Automatic Debit Scams
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