Consumer Scams Involving Counterfeit Cashier’s Checks Continue

December 22, 2010 – FDIC Issues Alerts On Counterfeit Cashier’s Checks

The reason why counterfeit official checks continue to appear is because they produce huge profits for criminals.  An unwary consumer, trained to believe that a cashier’s check is equivalent to cash, can be an easy mark for con men and criminals.

The increasing number of counterfeit cashier’s checks flooding the country continues to cause major problems for both banks and consumers.   The FDIC is routinely issuing special alerts on 15 to 40 banks per month that report counterfeit checks bearing their name.

Counterfeit cashier’s checks represent a major risk to consumers who can be held liable by their bank for the full amount of a deposited counterfeit check – see Why You Can’t Trust A Cashier’s Check.

Many consumers assume that a cashier’s check is equivalent to cash.  That belief is now dangerous to your financial health as a tidal wave of counterfeit cashier’s checks are now flooding the country.  The counterfeit cashier checks can be very similar to authentic teller checks.  The average consumer would not be able to detect a counterfeit cashier’s check.  Often times, the depository institution accepting the check is not able to detect counterfeit checks until the check is returned unpaid.

The FDIC has already issued 15 special alerts in December on banking institutions reporting counterfeit cashier’s checks. Counterfeit cashier’s checks bearing the following institution’s names are reportedly in circulation.

  • SA-153-2010: Counterfeit Cashier’s Checks Bearing the Name First Farmers Bank & Trust are Reportedly in Circulation
  • SA-152-2010: Counterfeit Cashier’s Checks Bearing the Name Cashmere Valley Bank, Cashmere, Washington, Are, Reportedly in Circulation
  • SA-151-2010: Counterfeit Official Checks Bearing the Name Webster Bank, Waterbury, Connecticut, are Reportedly in Circulation
  • SA-150-2010: Counterfeit Cashiers Checks Bearing the Name First Chicago Bank & Trust, Itasca, Illinois, are Reportedly in Circulation
  • SA-149-2010: Counterfeit Cashier’s Checks Bearing the Name High Point Bank, High Point, North Carolina, are Reportedly in Circulation
  • SA-148-2010: Counterfeit Official Checks Bearing the Name Eagle Community Credit Union, Garden Grove, California, are Reportedly in Circulation
  • SA-147-2010: Counterfeit Cashier’s Checks Bearing the Name FORUM Credit Union, Indianapolis, Indiana, are Reportedly in Circulation
  • SA-146-2010: Counterfeit Bank Checks Bearing the Name Paper City Savings, Wisconsin Rapids, Wisconsin, are Reportedly in Circulation
  • SA-145-2010: Counterfeit Official Checks Bearing the Name Summit Bank are Reportedly in Circulation
  • SA-144-2010: Counterfeit Cashier’s Checks Bearing the Name Farmers State Bank, Mason City, Iowa, are Reportedly in Circulation
  • SA-143-2010: Counterfeit Cashier’s Checks Bearing the Name Sandy Spring Bank, Olney, Maryland, are Reportedly in Circulation
  • SA-142-2010: Counterfeit Official Checks Bearing the Name Peoples Bank of the South, Lafollette, Tennessee, are Reportedly in Circulation
  • SA-141-2010: Counterfeit Cashier’s Checks Bearing the Name Farmers Deposit Bank, Eminence, Kentucky, are Reportedly in Circulation
  • SA-140-2010: Counterfeit Cashier’s Checks Bearing the Name First Bank Richmond, Richmond, Indiana, are Reportedly in Circulation
  • SA-139-2010: Counterfeit Cashier’s Checks Bearing the Name Center Bank, Los Angeles, California, are Reportedly in Circulation
  • The reason that criminals continue to produce counterfeit cashier’s checks is because the scam works. Many consumers would have doubts about accepting a personal check from a stranger due to the risk that the check would not clear. It has been a time tested practice to request a cashier’s check for payment to eliminate the risk of a bad check. Unfortunately, the prevailing belief that all cashier’s checks are as “good as gold” can no longer be relied upon.

    If accepting payment in the form of a cashier’s check for the sale of an item, exercise due diligence to avoid potential problems. Check with your bank on the authenticity of the cashier’s check, or better yet, hold off on delivery of the item sold until the cashier’s check clears your bank account.

    How Counterfeit Cashier Check Scam Works

    A typical scam using a counterfeit cashier’s check for a purchase usually involves the following ploy. The purchaser presents to the seller a cashier’s check for more than what is owed and gives some elaborate explanation for why the check exceeds the amount due. The seller accepting the cashier’s check feels safe, especially since the check exceeds the amount he is due.

    The buyer then asks the seller to cash the cashier’s check and immediately forward the overpayment to him.  The con man knows that banks are required to make funds on the first $5,000 of a cashier’s check available to the depositor within one day.   The seller deposits the check and sends the overpayment to the purchaser.  In three to five days, the seller finds out that the cashier’s check was counterfeit and that his account has been debited to make restitution on the counterfeit check.

    Consumer Vigilance Essential – How To Tell If You Are Being Scammed

    Ohio Valley Bank, which has previously reported counterfeit checks bearing its name, has the following good advice for consumers.

    If you can answer “YES” to any of the following questions,
    you could be involved in a FRAUD or about to be SCAMMED

    • Is the CHECK from an item you sold on the internet, such as a car, boat, jewelry, etc.?
    • Is the amount of the CHECK more than the item’s selling price?
    • Did you receive the CHECK via an overnight delivery service?
    • Is the CHECK connected to communicating with someone by email?
    • Is the CHECK drawn on a business or individual account that is different from the person buying your item or product?
    • Have you been informed that you were the winner of a LOTTERY, such as Canadian, Australian, El Gordo, or El Mundo, that you did not enter?
    • Have you been instructed to either “WIRE”, “SEND” OR “SHIP” MONEY, as soon as possible, to a large U.S. city or to another country, such as Canada, England, or Nigeria?
    • Have you been asked to PAY money to receive a deposit from another country such as Canada, England, or Nigeria?
    • Are you receiving PAY or a COMMISSION of facilitating money transfers through your account?

    Report Fraud To FDIC

    Information about counterfeit items, cyber-fraud incidents and other fraudulent activity may be forwarded to the FDIC’s Cyber-Fraud and Financial Crimes Section, 550 17th Street, N.W., Room F-4004, Washington, D.C. 20429, or transmitted electronically to alert@fdic.gov.

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