Consumers are frequently falling victim to a variety of scams that involve the use of forged or fraudulent cashier’s checks, often times resulting in extreme financial hardships.
The fake cashier’s checks appear to very authentic including the name of a legitimate United States bank and even containing the magnetic routing codes that appear along the bottom of the check, but most are fraudulent.
Those checks that are authentic have most likely been stolen and forged from legitimate businesses and individuals.
How Typical Cashier’s Check Scams Work:
- A seller is advertising a valuable item over the Internet. A "buyer,” often from a foreign country, contacts the seller about purchasing the item and states that he or she plans to use a cashier’s check issued from a bank in the United States. After the seller receives the check in the wrong amount, the buyer explains that he mistakenly sent too large of a check and requests that the seller wire the overage back to the buyer.
- The unsuspecting seller then deposits the cashier’s check in their bank account. Under federal banking law, the customer's bank is required to make those funds available to its customer on the first business day after the funds are deposited. This allows the seller to withdraw the "overpayment" before the check reaches the bank that supposedly issued it, which usually takes seven days, or longer. After wiring the money back to the buyer, the scam artist is nowhere to be found.
- Unfortunately for the consumer who withdraws funds from their account after depositing a phony cashier’s check, the consumer -- not the bank -- is responsible for those counterfeited funds. Under Colorado law, a consumer depositing a check into their account makes certain warranties to the bank regarding the authenticity of each deposited check. If the check is dishonored, the account owner becomes obligated to pay the amount due on the check. The bank whose name appears on the counterfeit check has no responsibility to honor it.
Here are some basic tips to follow whenever you are offered a cashier’s check:
- Never accept a cashier’s check for an amount greater than the purchase price.
- Call the bank that issued the cashier’s check when you receive it to verify the following information: the check number, the name of the person to whom the check was issued, and the amount of the check. Do not rely on the phone number that the buyer gives you. Research and locate the bank’s number from a reliable source.
- Be sure to wait until you can verify the authenticity of the check prior to giving the buyer the goods. Sometimes scammers wait to give the seller a check on the weekend or when banks are closed, and the check cannot be verified right away.
If you believe you have been victimized by a scam or wish to report suspicious activity, please file a report here.