Avoid the High Costs of Check Scams

It is important to know that checks don’t offer the same protections as credit cards and other forms of payments. Anyone can print what appears to be completely legitimate check and send it to you. Once you deposit that check into your account, you become liable for the funds. We accept your deposit on good faith. No one would be happy if we held every check that members deposited.

“Most Americans don’t realize they are financially liable when they fall for these scams,” said Susan Grant, vice president of the National Consumer's League, an Alliance partner. “There is no legitimate reason anyone would mail you a check or money order and then ask you to wire money in return,” Grant said. “People need to know that checks can take months to clear, even if the money initially looks like it’s in your account. The scammers know that, and most consumers don’t.”

The most common scams we see at the credit union are:

• Sudden Riches: The scammer claims the victim has won a foreign lottery or sweepstakes. The notice comes by mail, phone, fax or email. Consumers should know that winners of real cash prizes are notified by certified mail.
• Work-at-Home: The scams promise easy money by ‘processing’ checks. The victim deposits the checks and sends the money to the scammer, minus a small fee. Legitimate companies don’t do business like this.
• Overpayments: Scammers buy merchandise online, and then claim they mailed the wrong amount by mistake. The seller is asked to deposit the ‘wrong’ check anyway, and then return the ‘excess’ amount to the scammer. But the check doesn’t clear, and the victim has sent the scammer his own.

The cost of becoming the victim of one of these scams is always high. The victim ends up owing the credit union the funds which usually runs between $2000 to $5000. The victim usually ends up spending countless hours following up with authorities who are so overwhelmed that these cases are rarely solved. The victim suffers emotionally as well.

The only way to avoid these costs is to avoid the scams. If you would like more information, please feel free to send us an e-mail at info@gcefcu.org