Five ways to avoid scams
1) If you deposit a check from an unknown person, discuss it with your bank’s branch manager before spending the money or handing over anything of value.
While federal regulations require institutions to make funds from a deposit available generally within one to five business days, it can take a couple of weeks or longer before the bank discovers a deposited check is worthless. In that case, the bank will most likely hold you responsible for that money, said Michael Benardo, manager of the FDIC’s financial crimes section.
People often mistake “available funds” to mean “cleared funds.” Available funds are funds your bank has made available to you against your deposit. This does not mean the check has cleared. Checks don’t clear until the financial institution on which the check was written has surrendered funds to your bank.
2) Walk away from any deal if you get a check for more than the amount due and you’re instructed to return the difference. Often, the story may sound reasonable, but it’s never a safe bet.
3) Recognize other warning signs of a check scam, such as: The reasons for receiving a check are suspicious; you’re asked to send money outside of the United States (it’s difficult to track people down in another country); you’re pressed to send money right away; or you’re warned to keep things quiet.
4) Take additional precautions to make sure a check is good: Always ask for a phone number and a driver’s license, and check physical characteristics of the consumer with the photo. If suspicious, ask the customer’s birth date or even request a signature on a separate piece of paper; many crooks have numerous false IDs and may forget which one they are using.
Consider insisting on a money order or cashier’s check drawn on a local bank, so you can take the check there immediately, or consider asking for a money order from the U.S. Postal Service, then take it to the post office or call the automated toll free service at (866) 459-7822. Postal money orders use security features, such as Ben Franklin images (watermarks) repeated on the left side, top to bottom and a dark security thread running top to bottom to the right of the Franklin watermark, with tiny “USPS” letters facing backward and forward.
Private financial service companies also issue money orders, but don’t depend on a phone number that is printed on a check or money order.
“If this is a fraud, one of the criminals may answer and tell you that the check or money order is legitimate, or you may get a voice mailbox that the swindlers set up to sound real and reassuring,” said David Nelson, a fraud specialist at the FDIC.
In general, it’s always best to use a phone number listed in your local phone book or other directory. You also can try to confirm a person’s name, address, home and work numbers through online databases or directory assistance.
5) Train front-line employees about fraud. Counterfeiters often prey on small businesses, knowing they receive less training in detecting bogus currency than those of major corporations. Examine bills for watermarks, security threads, a three-dimensional look and a rigid, embossed texture, rather than a flat look and smooth feel. Also, compare bills to genuine bills. Many counterfeiters rely more on the inattention of employees than on their counterfeiting skill.
Immediately report fraud or anything suspicious to your bank, as well as the local FBI (www.fbi.gov/majcases/fraud/fraudschemes.htm.)
Read more about counterfeit check schemes at these links:
According to the Federal Trade Commission, last year Colorado ranked fourth in fraud complaints per capita, trailing only Utah, Nevada and Washington. For more information, check: