Easy ways to prevent check fraud and scams
Although check crimes are on the rise, you have the power to avoid becoming a victim, starting with your pen. Joe Bernardo, Wells Fargo head of Fraud & Claims Operations, shares tips.
Key takeaways
- Check crimes are on the rise: Check fraud and check scams are two types of attacks used by fraudsters.
- Be aware if it seems too good to be true: Be alert for checks you did not expect to receive or for amounts that are more than expected.
- Pay attention: Review your account statements carefully and frequently to catch and report any suspicious activity right away.
A woman in Georgia received an email from an individual who wanted to purchase furniture from her late aunt’s estate sale. She later received a check in the mail from this person for twice the amount of the furniture with a note asking her to pay the difference to a specific moving company and keep the remainder of the money “for her troubles.”
Does that sound too good to be true? It was. A Wells Fargo banker found red flags when she reviewed the check and customer’s emails: The name on the check did not match the name on the emails, and the address on the check was in a different state than the buyer said they lived. Sure enough, the banker investigated and discovered that the check had previously been cashed.
Scenarios like this one are becoming all too common. Although the use of paper checks has declined more than 7% per year since 2018, reports of check crimes (PDF) have almost doubled from 2021 to 2022. Fraudsters are employing low-tech methods like targeting mailboxes and older adults. So how do you stay ahead of check fraud and scams?
First, know that check crimes boil down to two types of attacks:
Check fraud
This more traditional attack involves fraudsters who have stolen legitimate paper checks, usually out of the mail. They use chemicals to “wash” the ink from the check and then write it out in their own name as if the check was originally intended to go to them. They may also forge endorsements and amounts. With the information changed, they cash the altered check to steal money from the account.
Check scams
According to the American Bankers Association, fake check scams are one of the most common instruments used to commit fraud against consumers. Fraudsters use various methods to steal money from their victims:
- Overpayments and online sales scams: Someone buys something from you online or in person and “accidentally” sends a fake check for more money than you expected, then asks you to deposit it and send a refund for the overage.
- Lottery or prize scams: You receive a fake check in the mail for “lottery or sweepstakes winning.” The check comes with instructions about what to do with the check, asking you to send back a portion of the winnings to cover taxes, shipping charges, or processing fees.
- Job scams: You receive a fake check from a company or business that instructs you to deposit the check and send back a portion or overage. These are sometimes positioned as an up-front signing bonus and look real. The goal here is for the fake check to be deposited and funds forwarded to the scammer. Ultimately, it’s you who will be liable for the funds once the check is returned.
Review your account statements frequently to minimize the likelihood of fraud occurring for an extended period. Don’t just review that a check was drawn on your account. Look at the images to make sure that a fraudster hasn’t intercepted your check, altered the payee, and made it out to themselves instead of your intended recipient.
How can you stay ahead of check crimes?
Joe Bernardo, Wells Fargo Head of Fraud & Claims Operations, shares these tips.
- Use secure digital payment alternatives, such as online or mobile banking.
- Set up account alerts so you’re notified of activity.
- Write in non-erasable black ink.
- Keep checks secure so they cannot be stolen.
- Don’t accept checks from people you don’t know.
- Don’t accept or cash a check for more than is expected.
- Understand why you’re receiving the check and verify that it’s for legitimate purposes. If something seems too good to be true, it probably is. Trust your intuition and don’t make rushed decisions.
- If you must mail a check, drop it off at the post office instead of putting it in a mailbox.
- Review your accounts, statements, and cashed checks images frequently.
Sometimes, it takes days or weeks for banks to clear a check. Wait to use those funds if you have concerns about the legitimacy of the check that you’ve deposited.
We make every effort to ensure that our customers’ money is safe. Awareness and vigilance are key to combating check fraud and scams. If you do see something of concern, contact Wells Fargo or your financial institution and ask them to investigate and take appropriate action.
For more information on spotting and avoiding check fraud and scams, visit the Wells Fargo Security Center.
