Fighting Fraud
By Better Business Bureau Serving Greater Cleveland
Fake check scams are skyrocketing. According to the Federal Trade Commission (FTC), in 2021 they received 39,113 reports of fake checks or foreign money offers with losses of over $78.1 million overall. This is a dramatic increase from reported losses of $47.4 million from the same scams in 2020. Fake check scams typically target consumers, but businesses can also become victims.
Recently, a local home repair business contacted Better Business Bureau (BBB®) Serving Greater Cleveland about a fake check scam. Norm Dillen, the owner of a Mentor-based and BBB Accredited Business, Choice Home Repair, described how a scammer solicited his company through a text message. The owner received a text in early September from the scammer who introduced himself as a man from Colorado named Howard Kirk. Kirk claimed he found Choice Home Repair through BBB’s website. Kirk then stated he desired to paint the interior walls of his newly purchased home on Engle Road in Brook Park. After corresponding through further text messages, phone calls and emails, Kirk sent Choice Home Repair a cashier’s check. Although the painting project was only estimated at $4,783.00, the cashier’s check was written for $9,891.50 and came with instructions to put half down on the project and then pay the previous homeowner $7,500 when Choice Home Repair obtained entry keys. The owner of Choice Home Repair immediately became suspicious and contacted BBB and local police. BBB was able to verify through the Cuyahoga County Auditor’s office that the reported owner of the newly purchased home did not match the scammer’s name.
To prevent becoming a victim of check fraud, BBB warns consumers and businesses alike to be wary of situations where a third party is trying to obtain immediate payment from cashed funds or is overpaying by check and requiring quick reimbursement. By law, banks must make funds available for deposited checks in a reasonable amount of time, but the bank will also recover money from the account holder when a check is discovered to be counterfeit. In short, a check casher will lose any money they spent, or sent back to the scammer, once a check bounces.
Additionally, BBB Serving Greater Cleveland is providing the following additional information to the public to avoid becoming a victim of a fraudulent check cashing scheme:
- Checks and Postal Orders Can Be Forged – Be skeptical of checks and postal orders because they can be easily forged. For cashier’s checks, consumers can Google bank routing numbers at the bottom of the check to see if it matches the bank it is supposedly from. Real checks also use special fade and smear-resistant ink. Check for any misspellings on the check itself. Review details for red flags such as oddball third-party company names listed as the check drawer.
- Available Funds May Not Be Cleared – Just because a bank deposited funds, doesn’t mean a check cleared. Checks are usually cleared in two business days but the process can take up to a week or more to complete. When in doubt, wait for funds to clear before withdrawing for personal use.
- Be Wary of Online Job Postings and Mystery Shopping – Some activities put consumers at a higher risk of encountering fake checks. Many online work-from-home job scams, particularly mystery shopping gigs, utilize fake checks. In these scenarios, scammers will mail out fake checks as payment or for reimbursement of work-related costs. Sometimes the scammer will claim they accidentally overpaid. Other times, they may ask a victim to purchase gift cards as part of their job duties and then mail the gift cards back to the mystery shopping company.
To read a 2018 BBB study on Fake Check Scams, click here. Visit BBB.org to read more about mystery shopping and employment scams.
Questions? Reach out to your BBB at 216.241.7678 or [email protected]. Have a scam to report? Report it to BBB.org/ScamTracker. At BBB.org, consumers can read more about job scams, including online interview swindles at BBB.org.
