Fake Check Scams: How To Identify Them (& What To Do)

What Happens If You Receive a Fake Check?

When Auriyon got an offer of $250 per week from “Pepsico” to wrap her car with a Mountain Dew ad, she was skeptical. But when a check for $4,850 showed up at her home, she quickly changed her mind. 

Her new “employer” asked Auriyon to deposit the check and wire $3,500 to a “car specialist.” It was only when she was told to buy an iTunes gift card with the remaining money that the alarm bells started ringing. 

But by then it was too late — the check bounced, and the $3,500 Auriyon had sent to the scammers came out of her account [*].

There were nearly 40,000 fake check scams reported to the Federal Trade Commission (FTC) last year, with losses of over $78 million [*]. But what makes fake check scams so dangerous is the amount of money that can be lost in a single scam. 

On average, victims lose $2,000 to fake check schemes — second only to cryptocurrency and investment fraud. Checks are a valid payment method. But if you receive one in the mail or are given a check from a suspicious source, you need to be cautious.

In this guide, we’ll explain how fake check scams work, what happens when you deposit one, and how to avoid the most common scams.

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What Are Fake Check Scams? How Do They Work?

Fake check scams are a type of fraud in which scammers send you fake or fraudulent checks and then request that you deposit the money and send it somewhere else. These scams succeed because of a federal law called the Federal Expedited Funds Availability Act (EFAA).

When you deposit a check, the EFAA stipulates that banks must make the funds available within one or two business days. However, it usually takes longer for banks to determine that a check is counterfeit. 

When they do realize that you’ve deposited a fake check, the bank removes those funds from your account — leaving you in the red for any cash that you were sent (or spent).

Here’s an example of how a typical fake check scam plays out:

• A scammer forges a check to pay for something that they’re purchasing. The check is made out for more than your asking price — like $1,500 instead of $1,000.
• You cash the check in good faith, and the bank makes the funds available to you before verifying the check’s legitimacy. Your bank shows $1,500 is available in your account.
• You send the “extra” money — $500 in this example — to the scammer via cash, wire transfer, gift cards, cryptocurrency, or some other non-reversible method. Scammers often have you send money to a foreign country, making it even harder to reverse.
• Later on, the bank inspects the check, realizes it’s a counterfeit, and debits you for the amount. Instead of your checking account reflecting a balance of $1,000, it shows a debt of $500. 

Remember: Just because the funds show up in your bank account does not mean the check is legitimate.

What Happens If You Deposit a Fake Check?

Depositing a fraudulent check can have serious consequences, including:

• The bank may withdraw the full amount of the check from your account. Once the check comes back as fraudulent, the amount you “deposited” will disappear from your account. Any money you spent or sent back to the scammer will come out of your account.
• You’ll lose all the money you sent to the scammer. You’re unlikely to get your money back once you’ve sent it to a scammer. Unfortunately, this means you can end up losing double the amount of the check (or more).
• Your bank might close or freeze your account. If you attempt to pass a stolen, fake, or forged check, your bank might regard that as suspicious activity and close your account until you submit affidavits proving it was accidental.
• You may have to pay overdraft or late fees. If you deposit a fake check and then spend the funds, you may overdraw your account when the amount is debited. This could result in overdraft fees, late fees if you miss a bill payment, or other fees (depending on your account agreement).
• Your credit score and banking history could suffer. Missing a bill can have serious consequences on your credit score. Banks and credit unions may refuse service to you if you have a history of depositing fake checks.
• You could face criminal penalties. According to some state laws, depositing a fake check with the intent to defraud can result in a misdemeanor or even a felony charge, according to the Uniform Commercial Code. If you’re the victim of a scam, you’re highly unlikely to face jail time or fines, but you may need to obtain legal advice.

🛟 Related: What Is Check Washing? How Can You Protect Yourself? →

How To Identify a Fake Check: 7 Red Flags

Fake checks are made to look as close to the real thing as possible. But since they only need to pass a preliminary verification process for a scam to work, there are usually several signs that they aren’t authentic.

If you receive a check, keep an eye out for the following [*]:

1. Your check is smooth on all sides. A real check commonly has one perforated edge — where it has been torn from a checkbook. Fake checks often have smooth edges on all sides because they’ve been printed, rather than torn out.
2. The check feels fragile, like it’s made from poor-quality paper. Real checks are printed on high-quality, thick paper stock that has a matte finish. If your check is thin, flimsy, or has a glossy finish, it could be fake.
3. The company’s name is misspelled or the address isn’t provided. Spelling mistakes indicate a poor-quality counterfeit. Fake checks often depict bogus addresses or P.O. box numbers in place of the bank’s real address. You can research whether a bank is real using FDIC.gov’s BankFind tool, or by calling the bank via the contact information on its official website. 
4. There’s a suspicious logo (or no logo at all). A real check will display the logo of the issuing bank. If your check has a logo for a bank you’ve never heard of — especially a generic name like “National Bank” — or the logo is faded or looks somehow off, it was probably forged.
5. The check number doesn’t match. The check number is shown twice, once at the top of the check and once in the magnetic ink character recognition (MICR) line. If the numbers don’t match, the check is fake. Also beware of low check numbers, as this indicates a new account which could belong to a forger. 
6. There is no MICR line. The MICR line is printed with ink that can be recognized by a reader. If your check doesn’t seem to have the special ink used for the MICR line shown at the bottom of the check, it’s a fake.
7. The routing number doesn’t match the bank that the check is supposedly from. The routing number is a nine-digit identification number unique to each bank. You can find your bank’s real routing number via its website or by calling its customer service department. If the number on your check doesn’t match, it’s probably counterfeit.

If you receive a fake check, don’t cash it. If you already have, contact your bank immediately to report the fraud and don’t spend any of the funds in your account.

The 5 Latest Fake Check Scams To Watch Out For

Scam artists are constantly trying to find new ways to trick victims out of their hard-earned money. Stay safe by learning what bogus check scams look like. Here are descriptions of some recent fake check scams:

1. Mystery shopper jobs
2. Car wrap advertisement offers
3. Work-from-home jobs scams
4. Overpayment scams
5. Surprise prize or sweepstakes

1. Mystery shopper jobs “evaluating” money transfer services

In this common scam, an “employer” will contact you, offering you what sounds like the perfect job – all you have to do is cash a check and send the money to another address. 

How the scam works:

• Scammers post fake job listings or reach out to you via email or social media claiming that they “found your resume” online.
• After a brief interview (often over WhatsApp, Telegram, or another messaging platform), you’re offered a job “evaluating” a payment processor — such as Zelle or Western Union — by cashing checks and sending the money through the processor.
• After you’ve sent the money, the check comes back as fraudulent, and you’re left footing the bill.

Don’t get scammed. Do this:

If someone is offering you easy money for sending cash online or as a wire transfer, it’s a scam.

Before taking a secret shopper job, double-check with the Mystery Shopping Professionals Association (MSPA) that your prospective employer is a legitimate service provider. Also, do an internet search for the company, and input words like “scam” to verify their legitimacy. 

The MSPA never hires mystery shoppers, so if you get a letter claiming to be from them, ignore it – it’s fraudulent.

🛟 Related: The 9 Worst Wire Transfer Scams (and How To Avoid Them) →

2. Car wrap advertisement offers that want you to pay by check

In these scams, fraudsters offer an advertising opportunity in which you can get paid to put brand advertisements on your car.

How the scam works:

• Scammers send emails or place ads on job boards with messages like “GET PAID TO DRIVE.” They offer to pay you a few hundred dollars per week to drive around with a product advertisement wrapped to your car.
• To get the decal installed, the scammers send you a check and tell you to deposit it and send the money to the supposed installers.
• But the decal installer doesn’t exist and the check is fake. You’ve just sent your own money to the scammer and will have to pay the bank back for the check.

Don’t get scammed. Do this:

Some businesses do pay people to put ads on their cars. But these companies never send people checks, and they pay the installers directly — no legitimate employer will ask you to pay anyone.

If you see a car wrap opportunity, make sure to research the company offering it. Confirm that they’re a real company. If so, contact them directly (via their website) rather than through the job posting, as that may be fraudulent.

3. Work-from-home jobs requesting that you buy supplies or pay for training

In this common work-at-home scam, an employer offers you a job but asks you to pay for your own supplies or training before starting the job.

How the scam works:

• Scammers upload job postings or send a job offer to you via email. After a quick interview, they tell you that you need to buy supplies (like a laptop) or pay for a training course – but they’re happy to front the bill.
• The scammer sends you a check which you need to cash and send to a “distributor” or “training company” via a payment transfer service like Zelle.
• Once you’ve sent the money, however, the check bounces, your “employer” vanishes, and you have to pay the bank back.

Don’t get scammed. Do this:

This is another too-good-to-be-true scenario. If your employer is going to pay for your supplies or training, they won’t need to mail you a check first. Likewise, a real employer is unlikely to want to interview you over a messaging app. 

Also, keep your eyes open for other red flags in job postings. These include bad spelling and grammar in the copy, suspicious email addresses, and requests for upfront payments or personal information. 

🛟 Related: Were You Scammed on Cash App? Here’s How To Get Your Money Back →

4. Overpayment scams when you’re selling items online

Overpayment scams are exceedingly common and can be attempted using any type of payment method.

How the scam works:

• Fraudsters reach out about an item you’ve listed online (like on Craigslist or Facebook Marketplace) and offer to pay with a check. 
• You receive a legitimate-looking check that’s made out for more than the sale price. The scammer then asks you to send the difference via a cash transfer app. 
• You deposit the check and the amount shows up in your account, so you ship out the item. But then the check bounces and your bank charges back the amount. You’ve now lost the item and however much money you sent the scammer.

Don’t get scammed. Do this:

Never accept a check when selling an item online. Marketplaces like Craigslist specifically warn against accepting cashier’s checks, certified checks, or money orders for items. 

If someone offers to send you a check as payment, end the transaction immediately and report the user. If you’ve received a personal check that’s more than the amount you were expecting, do not deposit it. Instead, ask the buyer to write a new check for the correct amount.

🛟 Related: Watch Out For These 7 Awful OfferUp Scams →

5. Surprise prize or sweepstakes winnings sent as a check

Fake lottery scams are the third most common type of fake check scam reported to the Better Business Bureau (BBB) [*].

How the scam works:

• You receive an email, text, or letter announcing that you’ve won a lottery or major sweepstakes, such as one from Publishers Clearing House. The letter says to call a phone number to confirm your winnings. 
• When you call, you’re told that there’s a processing fee, taxes, or other costs that need to be resolved before your winnings can be released. They send you a check to cover the costs – you just need to deposit it and transfer the money to a third party.
• But there’s no prize, the check is fake, and you’re left trying to explain what happened to the bank.

Don’t get scammed. Do this:

Legitimate lottery organizations will not ask you to pay a fee to collect a prize. If someone asks for payment upfront to “unlock” your winnings, it’s always a scam.

If you receive a message like this, never call the number provided — as it will lead to a scammer and another opportunity to con you. Instead, do an internet search for the sweepstakes, or call the real company directly to verify whether the prize is real or not.

🛟 Related: 2023 Bank Scams: 15 Ways to Protect Your Bank Account →

Did You Send Money to Scammers or Give Them Personal Information? Do This

If you’ve given money or personal information to a scammer, you need to act quickly to prevent further damage.

Here’s what to do: 

• Report the fraud to your bank. Contact your financial institution immediately, let them know about the fraud, and negotiate a repayment plan so that they don’t take any negative actions against you. They may also be able to put measures in place to protect your bank account from identity theft.
• Try to prevent the payment from going through. If you paid a scammer with a gift card, tell the company that issued it. If the card hasn’t been used, they may be able to freeze the card and return your money. If you’ve written a check to a scammer, issue a stop payment.
• Contact any creditors that could be impacted by your loss of funds. If you owe money or have bills due, contact those organizations immediately and work out a plan to minimize the consequences of late repayments.
• File reports with consumer protection agencies. Send complaints to the FTC, the U.S. Postal Inspection Service (USPIS), the Internet Complaint Center (IC3), your state’s Attorney General, and file a police report with local law enforcement. 
• Consider identity theft protection with credit and account monitoring. It’s a good idea to monitor your credit if you’ve fallen victim to check fraud, as you may be targeted again. 

How To Avoid Fake Check Scams

There are many steps you can take to proactively prevent falling victim to a fake check scam, including:

• Never accept blank checks or checks made out for more than the agreed-upon amount.
• Wait until a check officially clears before you send money, typically in 1-2 weeks.
• Don’t send a payee or third party money from a check — especially via wire transfer, gift card, or similar.
• Ignore “surprise” winnings or prizes in the mail. 
• Beware of foreign buyers or people who can’t meet in person. 
• Verify any check you receive by using the tips above. 
• Know the warning signs of an online scammer. 

The Bottom Line: Don’t Lose Real Money to Fake Check Scams

It’s sometimes difficult to tell a real check from a washed one. But if you look for the red flags and follow the steps above, you should be able to avoid becoming a victim.

With scams on the rise, it can be hard to stay vigilant. That’s where Aura can help. Aura proactively protects you against identity theft by monitoring your credit and personal information 24/7 for signs of fraud.

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