Check & Money Order Scams

What It Is
The underlying premise to these scams is based on the victim receiving a counterfeit check or money order, depositing the item in their own bank account, and forwarding a portion of the funds through a wire transfer service (Moneygram or Western Union) to the scammer.

How It Happens
The con artist may tell the victim to keep a portion of the check as a "gift" or "payment" and wire back the rest to an overseas or out-of-state recipient. The scam reveals itself after the money has been sent and the victim's bank later notifies its customer that the item was fake. Banks often release funds from a cashier's check or money order before it clears, so just because you can withdraw the money, it doesn't mean the check is good. It could take weeks for the real account holder of that counterfeit check to notice it, and then the funds will be reversed and the victim loses the money they sent. The wired funds have usually left the country, so recovery is nearly impossible. Wire transfers can be picked up at any location, so the victim never really knows where the money is going. Scammers contact their victims by mail, phone, but primarily online. Beware of any job or online relationship that ever involves wiring money. Con artists disguise this scam many ways. They may claim the check overage was printed in error or was a problem with a foreign money exchange to US dollars.

The following are variations of this scam:

Lottery or Sweepstakes Prize Scam
You've won a lottery or sweepstakes you're not sure if you've ever played. You receive an advance check, but have to return a portion for the taxes or fees. This scam is often targeted at Senior Citizens and persons who do fill out sweepstakes forms occasionally. We have also seen this scam disguised as an IRS refund that the victim is paying "taxes" on this way. Victims have lost hundreds of thousands of dollars in "taxes" -  there is no refund or prize!

Secret Shopper Scam
You receive a check to shop for products or test a company's customer service and you need to return a portion of the money in the process.

Foreign Royalty or Refugee Scam
A foreign national or foreign royalty contacts you and tells you they are fleeing to America or for some reason need your help getting money into the country. You receive a check as a test and are required to return a portion in good faith.

Inheritance Scam
You are told your long lost relative has died and you are the sole heir. You receive an advance check and are to return a portion for the taxes and attorney fees.

Internet - Classified Purchase Scam
You receive a check with an over-payment for an item you are selling (often something large and expensive). The purchaser asks you to wire the difference to a third party or back to them. The buyer may claim to be overseas or in the U.S. They may say they have arranged for a courier to pick up the item. They don't want the item,  just your money. There are warnings about these scams on Ebay and CraigsList pages.

Work at Home Scam
You get a job helping a company with their "payroll". You receive checks and deposit them in your account. Your job is to withdraw funds and wire them out. This scam is common among victims who have posted an online resume or job ad on a classified site.

How to Avoid It
  • Never wire money to someone you don't know personally.
  • Never wire money after depositing a check, even if it temporarily clears.
  • If you are hired for a job that doesn't make sense (like depositing and withdrawing money) don't do it!
  • Notify the online site where you obtained the information about the job about the scam.