Counterfeit Check Scams

Question:  How long does it take for a check to clear?
Answer: At least 5-14 calendar days even with Check 21 electronic clearing.

Criminals take advantage of the lengthy check-clearing process to steal your money. They do it by issuing counterfeit checks and requesting recipients to wire or Western Union money elsewhere as part of a phony deal. Recent schemes include the following:

• Fake lotteries, sweepstakes or drawings.
• Inheritance schemes.
• Favors for people met online.
• Mystery or Secret Shopper scams that involve "testing" money transfers.
• Collections work for people based in foreign countries.

Victims are led to believe they have won a prize, have an inheritance, or are doing legitimate service for an online contact. They receive a counterfeit check with instructions to wire part of the proceeds elsewhere for a mystery shopper test, to pay taxes or fees, or help an online "friend".

Victims forget about the fraud potential. They usually deposit the check and then send money somewhere by wire or Western Union. Federal regulations inadvertently assist criminals because banks are required to make funds available to the depositor before a check has really cleared. This provisional credit is usually the money that victims send to the criminals by MoneyGram™ or by wire.

Recall that a check clears slowly (5-14 days). A wire or MoneyGram, however, moves quickly (instantaneously). Therefore, victims take a big financial risk if they send money based upon a check that has not really cleared. If a deposited check is returned, the depositor is legally responsible for repaying the bank.

Please report to your bank any deal where you are asked or are expected to transmit money by wire or Western Union. This is especially important if you have not physically met the people you are dealing with.

Actual Scams Involving Counterfeit Checks:

Bank customers have lost thousands of dollars because they wired funds somewhere before they realized a check they received was counterfeit.  Remember:  Slow Check + Fast Wire = Fraud.  Here are just a few of the schemes:

• Fake Lottery or Sweepstakes:   Have you received check in the mail along with a letter saying that you won something or received a grant? The check is fake.   It’s a trick to get you to Western Union or Money Gram money back to the crooks before you find out the check is counterfeit.  Remember, checks take up to 14 days to clear while a Wire or Money Gram clears instantly.
• Mystery or Secret Shopper Scams:  Victims get a counterfeit check and are then asked to secretly “test” Money Gram or Western Union by sending funds back to the crooks.  It’s a great scam – if you’re a criminal.  Sorry, there is absolutely no chance your “employment” is legitimate if it involves testing a money transfer service.  Read the Bad News Section (below) before you leave this page.
• Fake Inheritance: Victims are told that an estate from a distant relative is about to be dissolved. Criminals, posing as legal officers, convince victims that "taxes or settlement costs must be paid" by wire or Western Union before the estate can be distributed. Pressure for the victim to wire money sometimes coincides with the receipt of teaser funds sent by the criminals.
• Bad News Section: You are responsible for whatever you deposit into your account.  If a check you deposited is returned as counterfeit, you are legally responsible for repaying the bank.  Customers who become involved in these scams – even unwittingly – and fail to repay the bank have faced criminal charges, ruined credit and bankruptcy.  Don’t let it happen to you.

Defensive Strategy:

• Always consider the fraud element when you are asked to Wire money anywhere in a deal with people you have not physically met.
• Always tell your banker if you received a check from a lottery, drawing, sweepstakes, inheritance or prize.
• Allow at least two weeks after depositing a check before acting upon instructions to ship goods or wire money.
• Be aware that your bank may release funds from a deposited check before the check has cleared. A two-week waiting period is not sufficient in some cases.
• Cashier's Checks, Money Orders and business checks are often used by counterfeiters.
• Allow at least 60 days for international checks or those that say "Payable Through" to allow for routing delays.

Ebay & PayPal Users - You are Being Targeted

Ebay and PayPal are constantly preyed upon by cyber-criminals who utilize state-of-the-art phishing methods. If you sell goods on Ebay or use PayPal, please do your homework to understand the methods criminals employ to steal your passwords and gain access to your account.

• Read the section on phishing.
• Seemingly innocent request for information about an item you are selling on Ebay may contain a link to a sinister web page that captures your log-in before passing your browser back to the legitimate Ebay site.
• Manually type the URL to Ebay or PayPal. Don't trust the links embedded in E-mail messages; they may lead to a fraudulent web page.

Phishing (think of fishing, but with "ph")

Crooks are sending E-mail with startling messages to trick people into revealing their debit/credit card number and PIN. The scam is known as phishing and is a very serious problem wherever E-mail exists. Some of the more recent messages include the following:

• The FDIC has decertified your insurance coverage!
• The IRS wants to Refund your Overpayment!
• Your Online Service is Expiring!
• Multiple log-in attempts noted. Please update your information!

The E-mail appears to be from State Bank or other trusted entity such as E-bay or the FDIC. Placed within the E-mail is a convenient web-link to a sinister form that is designed by thieves to get your banking information. The ultimate goal of the criminals is to get your debit/credit card number and PIN. Don't fall for it!

You are being phished by criminals if you . . .

• Receive an unusual E-mail with a link to a web-page that asks for any of the following:
• Your debit/credit card number and PIN.
• Your social security number, address, or birth date.
• Get a phone call from anyone who wants your debit/credit card number and PIN in order to "refund money."

Never reveal your debit or credit card numbers and PIN to anyone unless you are conducting a transaction which you have initiated. Bank cards are worthless for identification purposes, but are very valuable to criminals who want to drain your account from an ATM.

If you get an E-mail message that has you concerned, forward the E-mail to online@SBSU. com and contact us at 435-865-2394 before doing anything. It is much easier to delete a crooked E-mail than it is to recover stolen funds.

Defensive Tip: Avoid using embedded links in questionable E-mail to navigate to a web site. Manually type the URL directly into your browser. For example, the URL for State Bank of Southern Utah is www.sbsu.com. It is easy to defeat phishermen by manually typing URL's into your browser. Moreover, verify phone numbers included in an unusual E-mail that appears to be from your bank. Those numbers may lead to a fake answering machine.