Unlike a personal check, which is drawn against the personal account of the individual who writes it, a cashier’s check is issued by a bank, and the bank guarantees that the funds will be available when the check is deposited or cashed. Your own bank, in turn, is likely to make the funds available for you to withdraw even before the check has officially cleared — weeks before, in some cases.
Phony check scams take advantage of cashier’s checks’ quick availability. By the time the bad check bounces, the scammer is long gone. The victim is then responsible for reimbursing the bank that deposited or cashed the check. Learn more about cashier’s checks, common scams and what to do if you’re a check fraud victim.
Types of Cashier’s Check Scams
Here are some common scams you need to watch out for. All involve getting the victim to deposit a fake check and wire transfer the money back to the scammer.
Mystery Shopper Scams
Mystery shoppers get paid for making purchases and filling out reports about their experience. Legitimate companies use mystery shoppers to help them find opportunities for improvement. Unscrupulous individuals hire mystery shoppers for a phony bank or wire transfer service, for which the shopper gets a check to deposit in his account and is asked to wire the funds to a third party.
Craigslist scams consist of an offer to purchase your advertised product or service with a request to make a deposit using a cashier’s check. Alternatively, the scammer might offer a cashier’s check worth more than the purchase price, seemingly as a show of good faith, and ask the seller to refund the extra money via wire transfer.
Be leery about home-based job offers promising to pay you for processing payments through your own bank account or promising you a paycheck before you’ve done any work. For these common scams, the scammer sends the remote worker a check and asks the worker to deposit the check into their personal account and wire the additional money to the scammer or a third party.
Are Cashier’s Checks Safe?
Legitimate cashier’s checks are nearly risk-free. In fact, they’re a preferred payment method for large transactions, such as real estate purchases, and they’re also useful for transactions with individuals you haven’t done business with before. That said, it’s prudent to watch for red flags as they’re commonly used by scammers.
How to Spot a Fake Cashier’s Check
Although a phony cashier’s check can look like the real thing, some fakes have telltale signs to tip you off. Consumer and retired persons’ interest group AARP offers these suggestions for spotting counterfeit checks:
- Absence of a perforated edge indicating the check was printed on a business printer
- Poor-quality logo or absence of a logo
- Mismatched check numbers found in the top right corner and at the bottom right corner of the check
- Shiny ink used for the routing, account and check numbers at the bottom of the check
- A routing number that’s longer or shorter than nine digits
What If I’ve Been Scammed?
Contact your bank as soon as you suspect you’ve been scammed. If you haven’t withdrawn the money yet, the bank can reverse the deposit. If you’ve already withdrawn the cash, tell the bank you’re a scam victim and reimburse the money or request a repayment plan.
If you’re a victim of cashier’s check fraud, it’s important to report the scam to the police in order to document the fact that you’re a victim. The U.S. Federal Trade Commission recommends filing complaints with the FTC, the U.S. Postal Inspection Service, and your state attorney general.
Related: How to Report Identity Theft
How to Protect Yourself From Cashier’s Check Scams
Here are some tips for avoiding scams and protecting yourself from cashier’s check fraud:
- Avoid work-from-home jobs, and especially mystery shopping jobs, that require you to make deposits or transfer funds.
- Research companies that hire home-based workers and mystery shoppers before you accept a position. Refuse any position that requires an upfront payment.
- Don’t agree to use wire services to send money to strangers.
- If someone makes a purchase from you using a cashier’s check, insist that the check be written for the exact purchase price.
- Only accept cashier’s checks from banks with local branches you can contact to confirm that the check is legitimate.
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