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Fake check scam is back, targeting a new generation of victims

Be very leery if someone sends you a big check, then asks for change back

Photo (c) stock_colors - Getty Images
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Days later, the bank discovers the check is counterfeit and reclaims the withdrawn funds from the victim.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.

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