In today’s digital age, many transactions are now being done on the Internet. For this reason, my colleagues and I in the legal community have noticed that online fraud cases are on the rise. One of the principle forms of this type of financial deception involves the cashier’s check. Once considered a consistently trustworthy payment, cashier’s checks have become more questionable due to sophisticated scammers. This means a supposedly bank-issued check may not be as good as gold anymore.
It’s an unfortunate reality that cashier’s check fraud is a booming business for criminals both near and far. So I’d like to focus this blog on how you can protect yourself from cashier’s check schemes.
Types of Cashier’s Check Scams
According to the Office of the Comptroller of the Currency (OCC), there are a number of different cons that have been developed using cashier’s checks. These include:
- Online goods – If you have a product for sale online, a buyer sends you a cashier’s check for the ticketed price. Then you send the item to the buyer. You and your bank discover later that the check was fraudulent. Therefore, you lose both the product and the money you charged for this item.
- Purchase price and more – This scam is similar to an online goods sale except that the buyer sends you a cashier’s check in an amount that is more than your advertised purchase price. As a result, the buyer requests that you send the excess money to a third party, which could be located in a foreign country. After you follow these directions and wire the money as instructed, you learn that the check has no monetary value.
- Lottery win or legal settlement – You receive a letter stating that you’ve won a foreign lottery or you have the legal right to some kind of substantial settlement. The letter explains that in order to get this money, you need to pay a processing fee or transfer tax. However, the enclosed cashier’s check will cover that amount. All you need to do is deposit the check and wire the designated funds to a third party. In the end, that cashier’s check is worthless.
- Mystery shopping payment – A letter is sent to you that explains you’ve been selected to be a mystery shopper. With the enclosed cashier’s check, you’re asked to use a certain sum to buy merchandise and transfer another portion to a third party. The rest of the monies are yours to pay for your services. After depositing the cashier’s check and wiring the designated amount, you learn that you’ve been scammed.
In each one of the above scenarios, the fake cashier’s check will be returned to your bank as unpaid. Therefore, the amount of this check will be deducted from your account. If you don’t have the funds, the bank will go after you for the cashier’s check amount. The inevitable conclusion is that you will lose the goods that you sold, if that was the set-up, the funds that you sent to a third party or both your property and the wired money.
In my next post, I’ll discuss how you can avoid becoming a victim.