Elder Protective Services’ Advice on How to Recognize, Dodge, and Report Fake Check Scams

In 2021 the Department of the Treasury and the Internal Revenue Service (IRS) sent out checks to millions of Americans. At the same time, scammers also sent out millions of fraudulent checks to unsuspecting victims. According to the FBI, 70% of U.S. organizations reported check fraud, resulting in more than $18 billion in losses (Advanced Fraud Solutions). The Federal Trade Commission (FTC) reports that 2022 will also have devastating losses due to counterfeit checks. Any innocent elder could fall victim to the next fake check scam.

Scammers who operate fake check scams intentionally target seniors as they are more likely to use checks than any other age group. The fake check scheme exploits elders financially by baiting them for personal or sensitive information. These checks look credible and come in many forms. They could look like a government check, a money order, or even a personal check. Elder Protective Services has gathered information on the top three fake check scams and how to dodge them.

Lottery Check and Sweepstake Shams

The Scam: An unsuspecting elder receives a letter in the mail with the news that he or she has “won” a foreign lottery. The letter explains that a portion of the winnings needs to be wired back in order to cover taxes and fees. The check, however, bounces two weeks later and now the senior has lost hundreds or even thousands of dollars with no way of retrieving it.

What to Look For

• A check in the mail for a lottery or sweepstakes you did not enter.
• A check from a foreign bank.
• Lottery or sweepstakes winnings that can only be claimed after wiring back a portion of the winnings.

Protect Yourself

AARP’s Sweepstake Scam Slogan is “If you didn’t play a foreign lottery, you can’t win a foreign lottery.”

• Always examine suspicious checks for irregularities (more below)
• DO NOT trust a phone number for a bank that is printed on a suspicious check.

1. Phone numbers could lead to an impostor scam.
2. Call the number listed on the bank’s official website.

• NEVER wire money to an unverified source or person.
• ALWAYS wait at least two weeks after depositing a check from an unfamiliar source before spending or withdrawing that money.

1. Scammers take advantage of banks making check funds immediately available. A check could take days or even weeks to be discovered as fraudulent.

• NEVER provide financial or sensitive information, like bank account numbers or SSNs, to a source or person you cannot verify.

The Overpayment Tactic

The Scam: A potential victim lists an item for sale online, in a newspaper ad, or even at a garage or estate sale. A person makes a reasonable offer and sends the seller a check. The check ends up to be for much more than the asking or agreed upon payment. The scammer will claim that it was a mistake and ask the victim for a refund. Most banks make check deposits readily available, but the victim could also refund the scammer in cash. If the check is fake, it will bounce. The victim will lose the money that was refunded and his or her bank could even charge an overdraft fee.

What to Look For

• An offer over the asking price for an item being sold online or at a garage sale.
• A check with an overpayment of an agreed on price.
• Pressure Tactics.

1. Scammers will create a sense of urgency or employ scare tactics in order to make a victim pay IMMEDIATELY.

Protect Yourself

• Suggest an alternative to checks to a buyer who wants to pay you for an item or service.

1. Example: an online person-to-person payment app like Paypal.

• NEVER accept a check that is made out for MORE than the original or agreed open price.
• ALWAYS insist that the buyer void the “mistake” and write a new check for the correct amount.
• REJECT or back out of a sale if the buyer pressures you to wire back funds or provide a refund in cash or gift cards.
• Always examine suspicious checks for irregularities (more below)

1. DO NOT trust a phone number for a bank that is printed on a suspicious check.
2. Phone numbers could lead to an impostor scam.
3. Call the number listed on the bank’s official website.

• ALWAYS wait at least two weeks after depositing a check from an unfamiliar source before spending or withdrawing that money.

1. Scammers take advantage of banks making check funds immediately available. A check could take days or even weeks to be discovered as fraudulent.

• NEVER provide financial or sensitive information, like bank account numbers or SSNs, to a source or person you cannot verify.

Questionable Government Grants

The Scam: An innocent elder may see an ad or receive a phone call about a new government grant he or she is eligible for that also includes extra funds. If the unsuspecting senior takes the bait, the scammer will send him or her a check and demand that part of the extra funds be wired back to pay for taxes and fees. The scammer might also ask the elder to provide credit card or bank account information to cover certain fees. This private and sensitive information will be exploited by the scammer for financial gain.

What to Look For

• A “government official” phone call states that you are eligible for a grant and a check will be sent in the mail immediately.
• Demands for immediate repayment of taxes or fees.
• Keep in mind, there is never any charge to apply for a federal grant.
• The government grant is “exclusive” or “while supplies last”.
• Scammers create a false sense of urgency to pressure elders into providing sensitive information.

Protect Yourself

• REMEMBER: A real grant will not request or demand that part of the payment be returned.
• DO NOT trust a “government employee” who requires your personal information to apply for a grant over the phone.
• Legitimate government grant programs require you to fill out and submit an application.
• NEVER provide financial or sensitive information, like bank account numbers or SSNs, to a source or person you cannot verify.
• BE CAUTIOUS of classified ads that promote“free grants” and provide a toll-free number to call.
• NEVER wire money to an unverified source or person.
• ALWAYS wait at least two weeks after depositing a check from an unfamiliar source before spending or withdrawing that money.
• Scammers take advantage of banks making check funds immediately available. A check could take days or even weeks to be discovered as fraudulent.

Counterfeit Check Clues

Even in this tech-centered society, counterfeit checks continue to be a popular scam due to their creation ease. Scammers can quickly fabricate a fraudulent check with the use of a scanner and decent printer. Elder Protective Services suggests looking for the following counterfeit clues after receiving a suspicious check.

• Check for at least one perforated or rough edge.

1. Four smooth sides is the first clue that the check is fake.

• Look for a bank logo.

1. No logo is no-go.

• Confirm the bank address.

1. If the address is missing or includes a P.O. Box, do not cash the check.

• Inspect the check number.

1. A legitimate check will contain the check number in BOTH the upper-right corner and at the bottom in the MICR. Mismatched numbers equal a counterfeit check.

• Wipe the MICR line.

1. The magnetic ink character recognition (MICR) line should be smooth. Raised or shiny numbering means the check is fake.

• Examine the Paper Thickness.

1. Phony checks are typically thin or flimsy, whereas legitimate checks are thick and sturdy.

Key Takeaways:

Fake check scammers take advantage of banks and target innocent elders. Whether through dependable deceit or serious scare tactics, these scammers will try to trick seniors into wiring money or providing sensitive information. Elder Protective Services believes the best way to protect yourself or your loved ones from fake check scams is to be aware of the red flags and reject any suspicious check. By putting protective measures in place, seniors can be prepared to spot and dodge a counterfeit check. If you receive a questionable check, remember:

• It is perfectly okay to suggest an online person-to-person payment app like Paypal as an alternative to checks.
• NEVER accept a check with an overpayment.
• DISENGAGE if you feel pressured.
• ALWAYS examine suspicious checks for irregularities using the clues above.
• WAIT at least two weeks after depositing a check from an unfamiliar source before spending or withdrawing that money.
• DO NOT wire money to an unverified source or person.
• NEVER provide financial or sensitive information, like bank account numbers or SSNs, to a source or person you cannot verify.

Steps to Report Fake Check Scams

• Report it to the Federal Trade Commission. The FTC is responsible for protecting consumers and their personal information. The FTC cannot resolve individual complaints, but they provide individualized next steps.
• Report fraudulent checks that were delivered through the mail to the U.S. Postal Inspection Service.
• If scammers contact you online about a grant offer, file a complaint with the IC3. The IC3 is the Internet Crime Complaint Center, a government agency that makes it easy for individuals to report a crime that takes place online. They work with the FBI and local authorities to help manage and solve internet scams, such as rental listing scams.
• If you feel you received and deposited a phony check, contact your bank company immediately.
• If you believe you gave your personal information to a scammer, go to IdentityTheft.gov for steps you can take to protect your identity.
• You can find out more about how to report scams here.

Daniel Klibanoff, an advocate for seniors, is currently serving as the President and CEO of Multimedia Lists, Inc. Daniel is also the founder and director of Elder Protective Services, an enterprise aimed to serve and protect elders. Learn more at https://elderprotectiveservices.org/