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Alert: Cashier's Check Fraud

Avoiding Cashier’s Check Fraud

If you're suspicious of a check you've received, call the issuing bank. If you're a victim, notify all parties involved and report the crime to the FTC. Though commonly thought of as more secure than electronic payments or personal checks, cashier’s checks — checks created by and payable by a bank — are not immune to fraud. Security features initially made these checks hard to forge, but nowadays almost anything can be faked.

“There are fraudulent cashier’s checks out there, and just because it’s a cashier’s check doesn’t absolve the consumer” of the responsibility to make sure it’s legitimate, says Cary Whaley, vice president of payments and technology policy for the Independent Community Bankers of America.

Here are some common cashier’s check frauds, how to avoid them and what to do if you’ve found yourself with a phony check.

Common cashier’s check scams

Cashier’s check fraud isn’t a rampant problem. The use of all kinds of checks has declined as online payments have become more secure and accessible to more people. But cashier’s check fraud is dangerous partly because it’s not an everyday occurrence: You may not be guarding against it. Whaley says some common scams still use fraudulent bank checks to swindle people:

Payments from online buyers

This one is more common than the others, Whaley says. In this scam, you’re selling an item on Craigslist or a similar online site. The buyer pays with a cashier’s check, takes your item and is long gone before you realize the check isn’t good.

How to avoid it: Don’t take a bank check from someone you don’t know. If you must, ask the buyer to go with you to the bank that issued the check. A teller should be able to say if the check is good and the funds are available.

Lottery wins and surprise inheritances

Victims are told that they’ve somehow won the lottery in a country they’ve never visited, or have received a surprise inheritance.

This scam can be used to trick you into divulging personal information, such as bank account numbers, or into paying back a small portion of the money you have theoretically received in the form of a phony bank or cashier’s check. The payment to you, of course, doesn’t go through.

How to avoid it: “As much as you believe in the kindness of strangers,” Whaley says, “you really need to apply the smell test to that.” As the old adage goes, if something sounds too good to be true, it probably is.

To read more, click here.

Source: Nerd Wallet

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