Counterfeit check scams are cashing in
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A new survey by the Consumer Federation of America has found that nearly one-third of adults nationwide have been approached with fake check scams, usually involving fraudsters wanting to send them checks (for prizes, purchases or grants) and then asking them to wire back some of the money.
More disturbingly, the survey found that an estimated 1.3 million Americans have been taken in by the scams. The victims had lost an average of $3,000 to $4,000 when they wired the money, only to find out later that the checks were phony.
The survey of 2,000 adults found that the most prevalent scams involved fake sweepstakes or lotteries (66%), bogus grants (36%) and work-at-home activities (35%).
The scam artists relied on the false belief by a majority of Americans (59%, in the survey) that a check is valid when a bank allows funds from it to be withdrawn. In reality, most banks make funds available within a week, but it can take several weeks for a check to clear or be confirmed as fake. By then, the thief is likely to be long gone and the bank wants its money back.
The No. 1 defense against check fraud is to never, ever wire money to someone you don’t know well -- it’s the easiest way for scam artists to make off with funds without a trace.
Other hints from the federation: never agree to pay to claim a prize, never agree to pay to receive a grant and never agree to send money as part of a work-at-home job.
-- David Colker
