If you receive a surprise check in the mail or an accidental overpayment, or if you qualify for what appears to be a quick and easy gig, you might feel richer at first. But be careful, or you could end up scammed out of your own money.
» Learn more about how to prevent identity theft
Fewer people use checks these days, but check fraud is still a concern. According to Nasdaq’s Global Financial Crime Report 2024, check fraud created $26.6 billion in losses globally for the year. Here are some ways to spot scams and fake checks and what to do if you think you’ve uncovered fraud.
4 common check fraud scams
Fraudsters all have the same goal: getting money from you. But their tactics vary. Fraud experts and government websites generally describe variations on these check fraud scams:
- Windfall or lottery scams: You're told you won a foreign lottery or received an inheritance from a relative you’ve never heard of. You might get a check — that later bounces — and be asked to pay fees or foreign taxes in exchange.
- Craigslist or overpayment scam: You sell something on Craigslist or an online auction site, and the buyer sends you a check for a greater amount than you charged. They ask you to wire the difference back, and the check you received eventually bounces.
- Mystery shopper scam: Mystery, or secret, shopping is a legitimate research job involving visits to brick-and-mortar or online stores. But if you’re being solicited for this work or receive payment in advance, it could be a scam. You might be sent a money order or check to deposit, with instructions to spend a portion of money on a secret shopping assignment and then send the remaining amount back. The scam could result in you sending money to the scammer before you find out that the check they sent you was fake.
- Work-at-home scam: You’re hired by a foreign or out-of-state company to sell or ship products. You're asked to pay for certifications or supplies and don’t receive reimbursement.
Remember that, as is the case with most scams, if it sounds too good to be true, it probably is.
4 steps to spot a fake check and avoid trouble
Following these steps can help you avoid being a victim of check fraud:
1. Inspect the check
Some features of a check can suggest that it's not legitimate, including:
- An unusual check amount: The check shouldn’t be written for more money than you expect. Make sure the figure is exact if you’re accepting a check for a Craigslist item or other transaction.
- Personal details don't match: Confirm that the payee's name and business or personal address are real and match what you know about the person paying you. Look up any businesses on the Better Business Bureau website and perform a general search online.
- Missing items or other red flags: The check might be missing a signature, a bank address or logo or security features, such as watermarks or padlock icons. Fake checks can have misspellings in the printed text too. You may also notice that the check feels like cheap paper or has discolorations. A fake check may have a combination of these factors as well.
But the check itself — a personal or business check, cashier’s check or certified check — shouldn’t be the only thing you look at when guarding against fraud.
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2. Ask yourself why you received the check
If you received a check in the mail that seems odd, figure out who’s giving you money and their motive. Research the person or company to see if the payment makes sense and check any emails or other communication you had with them.
“Trust your instincts,” says Sarah Grano, a spokesperson for the American Bankers Association. “If something seems off, talk to your banker.”
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3. Don’t use the money
If you haven’t cashed the check yet, don’t. Contact your bank first and discuss your concerns. If you have cashed it, don’t spend that money.
Your bank must make money from a cashed check available to you within a certain period. For example, funds from a government or cashier’s check must be cleared one business day after you deposit the check. At that point, your bank might not yet have identified a check as a fake.
“Just because you can withdraw the money doesn’t mean the check is good, even if it’s a cashier’s check or money order,” Grano says. “Fakes can take weeks to be discovered.”
If the check bounces, your bank will have the right to withdraw the check amount from your account, even if you already spent the check funds and have a low account balance. That might mean ending up with a negative balance on your bank account.
Your bank may also charge you a deposited item returned fee and an overdraft fee for a negative balance.
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If you think you’re being scammed, report the incident to the proper authorities. Doing so helps law enforcement track down would-be fraudsters:
- Notify your bank and local law enforcement of the incident.
- Report the fraud on the Federal Trade Commission’s website.
- If the check was mailed: Inform the U.S. Postal Inspection Service online or by phone at (800) 275-8777.
- If the scammer contacted you online: File a complaint at the FBI’s Internet Crime Complaint Center.
