Check Scams

Inflation, housing affordability, dangerous products, the breakout of artificial intelligence, and of course, the proliferation of scams – these are topics that ConsumerAffairs covered in 2023 that resonated most with our readers.

To select the top stories of the year, we looked at how many views each story got the week it was published, as well as how many times it was accessed in subsequent weeks. As the year draws to a close, here are the 10 most-read ConsumerAffairs news articles of 2023.

Are you still in the middle class?

After inflation soared to 9% at one point in 2022, many families were wondering where they stood economically. To find out, ConsumerAffairs updated the data in the Pew Research Center’s inflation calculator to determine the minimum annual income needed in each state to be included in the middle class.

We found it varied widely, from $82,630 in Hawaii to $59,197 in West Virginia. Read more.

If a thief steals your iPhone they can steal a lot more

Apple’s iPhone has always had a rock-solid reputation for enhanced privacy but early in the year, researchers discovered there could be big problems if the device were stolen.

These thefts usually occur in a public place, like a crowded bar. If you pull out your phone and the thief sees you punch in your passcode, they might grab your phone and run. Within just a few seconds the thief can change the passcode, preventing the victim from accessing their account.

Then the trouble really starts. Read more.

AI used in terrifying fake kidnapping scam

The year began with ChatGPT, developed by Open AI, creating a sensation. It was the first widely-used AI platform that could be used by anyone to write computer code or a sonnet. 

Predictably, AI was quickly harnessed by criminals to run all types of dangerous scams. In April we reported how AI could clone anyone’s voice by obtaining just a few seconds from social media videos. 

That made the fake kidnapping scam even more dangerous. Read more.

Wronged Bank of America customers to receive $100 million

Bank of America has millions of customers and many of them, it turns out, were subjected to unfair fees. It got the attention of federal regulators who in July, ordered the bank to pay $100 million in compensation.

One of the 36,002 complaints lodged with the regulator said that the bank charged them interest on a $0.00 balance and told them that they had to have several months of a zero balance before interest wouldn’t accrue. 

Needless to say, this story gained a lot of attention among ConsumerAffairs reader who made the article one of our most popular during the summer and into the fall. Read more.

Did Southwest Airlines sell flights it knew it couldn’t fly?

The year began in the aftermath of Southwest Airlines’ holiday week meltdown that stranded thousands of Christmas and New Year’s travelers. Before the end of January the U.S. Transportation Department opened an investigation into what happened and why.

Airline employees pointed a finger at the company’s computer system, which they claimed was outdated. But investigators also wondered if the airline sold a lot more tickets than it had available seats.

In December, the government levied a record $140 million fine against the airline. Read more.

Thinking of moving to a cheaper state?

The housing market was the source of a lot of consumer pain in 2023. As mortgage rates doubled from pandemic lows, millions of Americans found they couldn’t afford to buy a home – unless they moved to a cheaper state.

Our article about a ConsumerAffairs study of the cheapest states to buy a home got a lot of attention last year. 

ConsumerAffairs researchers determined that North Dakota has the lowest cost of living in the U.S., followed by West Virginia and Michigan. In fact, the lowest-cost states are clustered in the Midwest and Appalachian Southeast with the lowest home prices in West Virginia. Read more.

More possible links between medication and dementia

Throughout the year our readers showed a lot of interest in stories having to do with cognitive decline and the slow progress toward finding effective treatments. When we reported possible links between dementia and acid reflux medications, it was the most-read story of the week.

When we followed it up with a story about possible dementia links to other medications there was even more interest. 

To be sure, the evidence of these links is far from conclusive, but researchers think the two classes that could have the strongest link to a risk of dementia are anticholinergics and benzodiazepines. Read more.

Ford leads in the number of recalled vehicles in the first half of 2023

It’s been a rough year for Ford. Besides losing billions of dollars on electric vehicles, a special ConsumerAffairs report in July found that it had the most recalls and most recalled vehicles in the first six months of 2023.

In terms of the number of vehicles recalled Ford topped the list with a total of 4.1 million cars, light trucks and vans. Most of those – nearly 1.3 million -- were for servicing brakes and hydraulic systems, followed by miscellaneous equipment issues ( l million) and backover prevention (807,000).

Industry sources reported there were 245 auto industry recalls from January through June -- up 3.4% from the same period a year earlier. Read more.

Watch out for the new Barbie scam

The summer’s blockbuster movie “Barbie” had the whole world talking about the iconic Mattel doll, brought to life on the silver screen. It didn’t take scammers long to try and exploit it.

In late July the ConsumerAffairs-Trend Micro Threat Alert found plenty of schemes around the movie. Jon Clay, vice president of Threat Intelligence at Trend Micro, warned readers to stay alert, saying Barbie was appearing in several Walmart-related scams. Read more.

Are you an Xfinity customer? Then look out for this scam

The Xfinity scam was among one of the most enduring scams ConsumerAffairs covered in 2023. We first reported it in April after hearing about Xfinity customers who were contacted by phone and offered a fake discount.

They were told they would get a 50% discount if they committed to keep the service for another two years but would have to pay the first year in advance – using Target gift cards.

The scammers only appeared to target Xfinity customers, suggesting they have access to Xfinity’s subscriber list. Read more.

The Federal Trade Commission (FTC) says scammers have become so enthralled with the results of using cryptocurrency as a way to get people’s money that it now accounts for one in every four dollars lost. The agency recently found that the median amount that someone’s been tricked out of using Bitcoin, Tether, and Ether is $2,600.

For many, the world of cryptocurrency is probably an enigma. The reason many scammers are drawn to it is that there is no bank or centralized authority to flag a suspicious transaction and stop it from being completed. Unlike a credit card charge, cryptocurrency transfers can not be reversed. 

Many scammers are doubling down by piggybacking their ruse on social media. The FTC says nearly 50% of people who lost cryptocurrency to a scammer since 2021 were tricked by a simple post, ad, or message on a social media platform

Most of the losses that people reported from social media were investment scams. The agency said $575 million of cryptocurrency scam losses were about bogus investment opportunities since 2021. That's far more than any other fraud type. 

“The stories people share about these scams describe a perfect storm: false promises of easy money paired with people’s limited crypto understanding and experience. Investment scammers claim they can quickly and easily get huge returns for investors. But those crypto 'investments' go straight to a scammer’s wallet,” the agency wrote in its report. 

“People report that investment websites and apps let them track the growth of their crypto, but it’s all fake. Some people report making a small ‘test’ withdrawal – just enough to convince them it’s safe to go all in. When they really try to cash out, they’re told to send more crypto for (fake) fees, and they don’t get any of their money back.”

Spotting cryptocurrency scams

What are the telltale signs of a cryptocurrency scam? Perhaps one of the most common is a message or pop-up that supposedly comes from a major company or government agency that claims there’s a problem or security breach on a person’s account. They might ask for personal information or suggest transferring money into a cryptocurrency account, but it's all a ruse that's meant to defraud the victim.

Here are some other things that the FTC says consumers should keep in mind:

• Beware of offers that seem too good to be true. Know that only scammers guarantee big payouts or fast, easy money. These lies get you to “invest," but you won’t get any of your money back.

• Don’t mix online dating and investment advice. If a new online love interest wants to show you how to invest in cryptocurrencies, it’s likely a scam.

• Spot the scammers asking you to send cryptocurrency. Real companies and government agencies will never tell you to buy cryptocurrency to sort out a problem or protect your money.  

For help spotting cryptocurrency scams, the FTC suggests that consumers check out more of its findings and advice here.

Hanamint of Greensboro, N.C., is recalling about 12,000 swivel rocker and glider chairs.

The chair’s post can separate from base, posing a fall hazard.

The firm has received 26 incidents of the chair’s post separating from the base, including one injury involving a small scrape.

This recall involves all dining swivel rockers, club swivel rockers, and club swivel gliders in all designs with mechanisms that have solid posts.

The aluminum framed chairs are for indoor and outdoor use and were sold in a variety of finishes including black, desert bronze and terra mist.

The Hanamint logo is cast into the underside of the seat.

The chairs, manufactured in China, were sold at Christy Sports, Chair King, Today’s Patio, The Great Escape, Fortunoff and other stores nationwide from January 2020, through June 2020, for about $600.

What to do

Consumers should immediately stop using the recalled swivel rockers and gliders and contact Hanamint for a free repair.

Consumers may contact Hanamint at (800) 298-9210 from 8 a.m. to 5 p.m. (ET) Monday through Friday, by email at info@hanamint.com, or online at www.hanamintstore.com and click on RECALL Swivel Rockers and Club Swivel Rockers at top of page for more information.

Rite Aid of Camp Hill, Pa., is recalling about 18,800 folding patio chairs.

The chair frame can bend causing the user to fall, posing a risk of injury.

The firm has received four reports of chairs bending unexpectedly, including one report of a minor bruise and one laceration injury.

This recall involves two folding, metal framed patio chairs with padded seats, sold in tan and gray.

The chairs measure about 24 inches long by 22 inches wide by 37 inches high.

UPC number 011822956628 and item number 9043325-MMXIX are printed on the packaging of the tan chair.

UPC number 011822952361 and item number 9044998-MMXIX are printed on the packaging of the gray chair.

The chairs, manufactured in China, were sold at Rite Aid stores nationwide and online at RiteAid.com from February 2019, through June of 2019, for about $30

What to do

Consumers should immediately stop using the recalled chairs and return them to any Rite Aid store for a full refund.

Consumers may contact Rite Aid at (800) 748-3243 from 8 a.m. to 8 p.m. (ET) Monday through Friday, 9:30 a.m. to 6 p.m. Saturday, or online at www.riteaid.com and click on "Product Recalls" at the bottom of the page under “Customer Care” at the bottom of the page for more information.

A decade ago, fake check scams were so common that ConsumerAffairs created an entire category to document them.

Well, they're back and targeting a new generation of victims. The Better Business Bureau has issued a new report that found the largest group of victims of fake check frauds are consumers in their twenties. Small businesses, lawyers, and banks are not immune from this scheme either.

Victims are snared when they accept a job, or otherwise enter into some kind of financial relationship with an out of town enterprise. The victim receives a large check with instructions to cash it, then send some of the money back, or to someone else for some purpose.

The check is usually an excellent forgery and is initially accepted for deposit by the victim's bank. The victim them withdraws some of the money and wires it as instructed.

Days later, the bank discovers the check is counterfeit and reclaims the withdrawn funds from the victim. But because the victim has wired that money to the fraudster, there is no way to get it back.

Big increase in complaints

The BBB report says phony checks were involved in 7 percent of complaints filed with BBB's Scam Tracker. It says the number of complaints received by the Federal Trade Commission’s (FTC) Consumer Sentinel database and the Internet Fraud Complaint Center more than doubled between 2014 and 2017.

The fraud usually centers around an alleged employment opportunity or a phony sweepstakes. Earlier this year, the FTC warned consumers that scammers were using the promise of a mystery shopper job to launch the fake check scheme.

Emma Fletcher, with the FTC's Division of Consumer and Business Education, says victims are often recruited to test the money transfer service at a Walmart. They receive a check, are told to deposit it, then wire the cash back to the scammer.

'Unhappy ending'

"Fast forward days or weeks to the unhappy ending," Fletcher writes on the FTC blog. "The bank finds out the check you deposited is a fake, which means you’re on the hook for all that money. How does that even happen? Well, banks must make funds from deposited checks available within days, but uncovering a fake check can take weeks."

Kathy Derrick, of Downers Grove, Ill., is a recent victim. She told Chicago TV station WLS that she lost $2,000 when she responded to a work-at-home job posting on a legitimate website.

There is a simple way to avoid becoming a victim of this comeback scam. If anyone tells you to cash a large check and send most of it back, you are almost certainly dealing with a scammer. No legitimate enterprise operates that way.

Just who is behind the fake check scam revival? According to the BBB report, it appears to be Nigeria-based operators -- the same folks who brought you the Nigerian prince scam of the early 2000s.

College students beware: the Better Business Bureau and the FBI have both issued warnings about a new work-at-home scam targeting students through their school email accounts. This latest scam is a bad one even by scam standards: with most such scams, the victims “only” need worry about losing their money or personal-computer security. But anyone who falls for this latest work-at-home scam risks being arrested and prosecuted for various felonies!

Most work-at-home scams are actually check scams, and most check scams try to cheat their victims by asking them to deposit bad checks in their bank accounts, then withdraw a small portion of that money and give it to the scammer before the check clears – or, more specifically, before the bank informs you that the check did not clear, because it's a fake.

Suppose you have $1,000 in your bank account, and receive a scam check for $500; the scammer asks you to send him $50, and you can keep the rest. So you deposit the $500 check in your account, still having no idea it is fraudulent.

Now, your account's “current balance” is $1,500 — that's the combined amount of the $1,000 you definitely have, plus the $500 you might have, if and when the check clears. But your “available balance,” the money actually available for withdrawal, remains only $1,000, and won't increase unless and until that $500 check clears.

You withdraw $50 to send to the scammer, bringing your current and available balances down to $1,450 and $950, respectively — but when your bank finds out there's no money to back up that $500 check, your current and available balances both say $950 – and the $50 you gave the scammer is gone.

That's why you should never trust a deposited check until after the bank confirms that the funds did indeed go through, and your current and available balances match. However, that will not protect college students from falling for this particular variant of the work-at-home scam.

"Payroll department"

Here's how it seems to work, according to the Internet Crime Complaint Center (IC3) : the would-be victim gets an email offering a job with a fictitious company, usually a job in the “payroll” or “human resources” department. Should you accept the job, here's what happens next:

The “position” simply requires the student to provide his/her bank account number to receive a deposit and then transfer a portion of the funds to another bank account. Unbeknownst to the student, the other account is involved in the scam that the student has now helped perpetrate. The funds the student receives and is directed elsewhere have been stolen by cyber criminals. Participating in the scam is a crime and could lead to the student’s bank account being closed due to fraudulent activity or federal charges.

In other words, your scam-boss is not asking you to deposit a fake check so he can extract money from your account; he's sending you real money which he stole from someone else! And your “job description” basically boils down to money laundering.

The easiest way to protect yourself from this scam (and other forms of check scams) is to remember that in legitimate, non-scammy jobs, money only ever flows in one direction: from the boss to the worker, from employer to employee.

No honest employer will ask you to reverse that flow of money, not even in the event of overpayment: if someone in your payroll department made a typo and gave you an extra hundred bucks this week, chances are you'll either receive $100 less in your next paycheck, or (depending on the timing), that initial, too-large paycheck will be cancelled and a new one for the proper amount issued immediately.

Of all the scams seeking to separate honest people from their money, the “check scam” (or “cheque scam,” if you prefer Commonwealth spelling conventions) is usually most likely to hit small business owners, or maybe direct-sales representatives selling the likes of Avon or Mary Kay from their homes — in other words, the people who in today's economy are most likely to accept checks from people they don't already know.

But this week, the Better Business Bureau warned about yet another variant of the check scam, this one tied in with an employment scam offering job-seekers paid work as “secret shoppers.”

The label “check scam” refers to any type of scam that first requires you, the victim, to mistake a fake check for the real thing. The simplest (and oldest) form of check scam is simply buying goods or services and paying with a bad or fake check, in which case you, the seller/victim, have lost the value of whatever good or service you just sold.

Most check scams, like the secret shopper scam, are far more complex. They ask you to deposit a check into your account and then send money back to the scammer who sent you the fake check in the first place. For example, here's how the Better Business Bureau blogger described the Secret Shopper check scam on May 5:

You receive an email informing you that you’ve been offered a job as a secret shopper. To get started, the message instructs you to reply and confirm your mailing address. After doing this, you will receive instructions and a check to cover your fee and shopping expenses. … Your instructions tell you to deposit the check, subtract your fee and shopping expenses and wire the rest back—but don’t do it. The check looks real, but it’s a fake. … If you deposit the check and draw money against it, you will be responsible for those funds. When the bank rejects the fake check, they will delete the advanced funds from your account.

With minor variations, that's how most check scams work; they vary only in the excuse they invent to justify why you, the person who supposedly just received money in the form of a check, should give some of that money to the check-writer. If you sell Avon or Mary Kay, for example, the scammer might place a large order with you, send a check for payment, and tell you they “accidentally” wrote the check for too much money... so, hey, why don't you just deposit that whole check in your account, then withdraw the extra money and wire it back to me?

Indeed, many of the classic infamous “Nigerian email” scams turn out to be check scams; if you respond, the Crown Prince Oil Minister or whatever super-rich person the scammer's pretending to be will often send you a check for a large sum of money and ask you to wire back a small fraction of it. Of course, anything you send ultimately comes out of your own bank account, since that check was utterly worthless.

The simplest and easiest way to protect yourself from check scams is to remember three rules. The first two rules are check-specific: when you deposit a check into your bank account, never assume the money is actually there until the bank tells you the check has cleared. And if you're in business and accept checks as payment, never accept checks for overpayment.

The third rule applies to everybody, whether you accept checks or not: never, ever wire money to somebody you don't know.