In this post I will focus on check fraud scams and for a reason you might not think. When we think of scams, we tend to think about trying to give older adults the tools they need to avoid being the victim. In fact, in the Tri-Tips newsletter a scam is highlighted every month. While the need to educate older adults is still important, a risk report from the Better Business Bureau found that there is a scam type that hits males 18-24 more than any other demographic. It is interesting to note that in the years from 2016 to 2020 this scam still shows up at the top of the list of scam types for this age group.
What is this scam?
This scam involves working for an “employer” doing what seems like a-little-too-easy work. First the victim receives a check, deposits it and is requested to do something with the money that was deposited. The reason why it is a check fraud scam is because the check is a fake. There are two primary versions of this scam.
In the first version, you are sent a check as “up-front money” to be used for a home business. You are asked to use the money to purchase supplies to set up your new home office. How can you tell that your new so-called employer is not legitimate? Often the interview process (if there is one) is way too simple with much less involvement than the normal interview and hiring process.
In each case, what happens is that your bank initially credits your account for the money while the check clears — in fact the bank is required to do so. Eventually your bank discovers that the check is worthless (bounces), and they will then withdraw (back out) the amount of the check from your account. This might even take weeks for the fraud to be found. Thus, not only are you now out the amount of the check, but anything you withdrew money for and wired away, or used to purchase things is also money spent from your own funds.
How does one avoid becoming a victim of check fraud scams?
The checks themselves are getting so good that even bank tellers are not able to spot them as fake, so don’t expect to be able to tell just by looking at the check. Instead, do a little research on the internet before you start doing business with a new company. Google the company name and see if there are any comments or complaints about them. If the check is from an individual, that’s a red flag already. Get a second pair of eyes on the business or individual by asking someone else such as a parent or someone else a generation older than you, if the business sounds legitimate.
Don’t respond to unsolicited emails or telephone calls asking you if you want to go into business or promising riches when getting into business. Unless this is your first job, you have likely gone through a full interview and hiring process for a job. If this hiring and interview process (all done remotely, likely) is very different and very easy to get hired, that should also be at least a yellow flag to investigate further. At a minimum you don’t want to become involved in a check fraud scam.
(This is an updated post from an article that first appeared in the Tri-Tips newsletter in August of 2017)