Hey guys.
Today, I wanted to help spread awareness about fraud and scams involving checks.
There are lots of different ways criminals go about committing fraud and scams, but quite a lot of them involve issuing fake or bad checks out to their victims. This act is very heinous and damaging, because not only do victims stand to lose a lot of money without any hope of recovering it, but they also lose good standing with their banks. Why that is, is quite simple.
Even though victims don't know that a check is bad until it is too late, if they happen to take out any money after depositing the check, they are pretty much taking out money that doesn't exist. Money taken out that doesn't exist end up being covered by the bank. Basically, regardless of being deceived by someone else, the victims took the bank's money and owe that money back.
Because the victim's bank also suffers a loss, depending on how much money is lost, the bank may even terminate the victims' accounts and ban the victims from doing almost anything with them. To make matters worse, the loss might also go on the victims' permanent record, preventing them from opening a new account at another bank until the old bank is repaid what was taken from them. It is an unfair and devastating situation for victims, but one, in the eyes of bank policy, they are as much responsible for.
But there are ways to protect yourself from such fraud and scams and avoid suffering such damage to your finances and reputation. As long as you take certain precautions when you receive a payment via check, you prevent yourself from becoming a victim of fraud and falling into malicious traps. What are these precautions? Let's explore them together now.
First up is what this millennial think is the best way to keep yourself safe from getting hurt by possible bad checks: Instead of depositing the checks you receive at your own bank, go to the bank labeled on the check to cash it out. Any bank can tell you right away if a check with their name on it is good or not. For example, if you get a check with the Bank of America logo, you can go to any bank using the Bank of America name and get cash for it. The bank teller or customer service officer will take a look at the check and then find out if the check is good or not. They might not or cannot say any more than that for privacy reasons but getting a "no" from them is enough to let you know that the check is not good, at least for now, and that you could have gotten into trouble with your own bank for depositing a bad check.
You can also call the bank labeled on the check to verify if it is okay to deposit. That's the second-best way, in this millennial's opinion. Over the phone, the bank should be able to tell you if the check is good, or at least legitimate.
However, with over-the-phone contact, things could get awkward. People working in the bank's call centers are naturally cautious about what they say to people who call them, especially when it concerns account information. You can explain the situation for them, but I wouldn't recommend pushing the call center for definitive answers. If you're not satisfied with the answer, then better to just go see an in-person representative of the check's bank and try cash it out.
If you can't do either, or you're willing to take a risk, you can deposit the check into your own account. But DO NOT take the money out right away. Wait at least a week before you start spending. A week or so should be plenty enough time for the check to be cleared as good or not. If it's good, you got money. If it turns out to be bad, you might get charged a penalty fee, but a loss of $50 or less is a lot better than losing money in the hundreds or even thousands.
One thing to keep in mind, if you receive a check from someone and they want you to use your own account to cash the check and use the money right away, chances are they are a scammer. This chance doubles if they discourage you from going to cash out the check at whatever bank the checks are supposedly connected to, which should be okay for anyone being legit on their payments.
One common scam that uses fake or bad checks is called a Job Scam. Scammers pretend to be companies, tricking their victims into thinking they got a job to buy stuff like goods, supplies or services for the company. The scammers send their victims fake checks under their name, saying the money is for the payments. But really, the victims are giving their own money, or their bank's money, to the scammers who are using a second made-up company to take that money.
This method of scamming is extremely time sensitive, so scammers will be impatient and rush their victims to take out the money as soon as they can. A legit company should already know the way banks work and be okay with delays or at least understand they can't be helped. In the case of an emergency where money is needed right away, a legit company should be okay with the check being cashed at the bank it's supposed to come from. Only a scammer would NOT be okay with the check being cashed like that since it'd be found out right away to be fraud.
And here's a bit of advice for all of you guys and gals looking to make a little bit of extra cash selling some old stuff online: if you get paid by check, make sure it clears first before you mail out the goods to the buyer. That goes for payments done online too. There are some nasty people out there who'll pull whatever tricks they can to cheat sellers and get stuff for free.
That's all I got to say about the topic for now. Make it a habit to practice the precautions I've mentioned above and whatever other advise you might get from your bank and stay vigilant for anything strange. Do all that and your money will stay out of the hands of criminal scum.
Stay safe out there, and happy reading.
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