How to Stop a Check Cashing Scam in its Tracks

Now that we have popular online payment services, you might think that check scams have become a thing of the past.


Even though it seems like everything is done on the Internet these days, there are still a lot of people who either don’t have bank accounts or aren’t comfortable using services like online banking.

These days, scammers have gotten smart enough to target people both online and off. There were 21,020 complaints of fake checks just in 2015.

Check cashing scams are still very real. No matter how our technology evolves, there is always going to be someone out there who wants to trick you out of your money.


Victims can lose as much as $4000 from scams like these — you should know how to protect yourself.

How do you know how to spot the tricks? Read on to find out.

What does a check cashing scam look like?

Scams these days have evolved to prey on people who use technology, instead of just sending people fake checks in the mail.

For example, let’s say you have some merchandise for sale on Craigslist. Someone contacts you and offers to buy it.


There’s just one problem, though — they’re not in the United States, and they can’t send you the money without paying some hefty fees.

Instead, someone else who is in the U.S. will pay you, maybe a friend of theirs who owes them some money.

This friend sends you a check for more than what you asked for. You’re supposed to wire the extra cash to the person buying your merchandise in the first place.

You cash the check, it goes through, and you ship off the merchandise thinking that you’ve made a successful sale.


Or maybe you’re looking for a job where you can work from home, and someone approaches you with a pretty sweet deal.

The gig is cashing checks for people who can’t do it themselves for whatever reason. Each check is just a little bit more than what each person is owed.

You deposit the checks and your bank credits your account quickly. You keep some of the money as your commission and wire the rest to the ‘customer.’

The problem with both of the scenarios above is that those checks are fake, and now you’re on the hook for that money.


Wait, but how does that work?

Here’s a pretty common question: If the check is fake, why did my bank deposit the money into my account?

There are a few reasons.

For one, check cashing scammers are good at what they do. They might create a fake check, but use the name of a real company to throw you off. We’re more likely to trust names that we recognize.

They can also create checks that look convincingly real, even to a bank teller.


In both cases, the mistake isn’t caught until it’s too late. Even though there are policies in place to prevent check fraud, nothing is perfect.

Under federal law, your bank is required to make the funds you deposit available for use within 1-5 days. However, it can take weeks for the bank to figure out that a check is a forgery.

In the meantime, most people would have spent the money that was deposited, because it was already credited to their account.

Banks also charge fees for fake checks and checks that bounced.


So not only do you owe the bank the money from the fake check, you’re also paying extra fees on top of the money you lost. And if you don’t have enough money in your account to cover it, you can be slapped with overdraft fees or even a lawsuit.

Meanwhile, the person who sent you the fake check has disappeared with the money you wired them. And because you’re responsible for the checks you deposit, you’re the only one who faces any consequences.

How do I protect myself from check cashing scams?

The last thing you want is to get caught up in a never-ending money nightmare. There are a few ways to know a scam when you see it.

If you think it’s too good to be true, it probably is

Did you get an unexpected check in the mail from an unknown sender? Or maybe you received a letter that said you won a lottery you don’t remember entering…and all you have to do to get your $4 million is paying $2000 in transaction fees?


As much as we would all love to believe that it’s possible to get money out of the blue, odds are that’s not going to happen.

If someone you’ve never met is suddenly sending you free money — or asking you to wire over cash to get even more money — it’s probably a scam.

Don’t accept sales for more than the amount you’re asking

This mostly applies to people selling merchandise online. There aren’t any legitimate reasons for someone to send you more money than you want, as great as that sounds.

If a stranger wants to pay you for something, ask them for a cashier’s check from a bank near you for the exact amount.


Be suspicious of people who overpay and then ask you to wire the extra back to them. In reality, you probably won’t be paid at all.

Be wary of extra fees

Is someone sending you money from abroad and asking you to pay the foreign transaction fee? Is a contest or lottery asking you to pay fees to receive your money or increase your chances of winning?

Although things like foreign transaction fees can sometimes be legit, if this request is coming from someone you don’t know, that’s a sign that something is wrong.

Fees that come out of nowhere are sketchy. When it comes to checks, it’s always better to be safe than sorry.


If you think a check is fake, or if you’re a potential victim of a check cashing scam, contact your local police department. No matter what the signs are, if a check is suspicious, don’t deposit it!