Counterfeit Cashier’s Checks Big Problem For Consumers and Banks

FDIC Warnings On Counterfeit Cashier’s Checks

The large number of counterfeit cashier’s checks flooding the country continues to cause major problems for both banks and consumers.  The prevalence of counterfeit cashier’s checks represents 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 this week reported that another 7 different banking institutions reported counterfeit cashier’s checks bearing the following institution’s names:

  1. Cape Cod Five Cents Savings Bank, Orleans, MA
  2. First Federal Bank of North Florida, Palatka, Florida
  3. United Midwest Savings Bank, De Graff, Ohio
  4. First Bank, Troy, North Carolina
  5. First Equity Bank, Skokie, Illinois
  6. WestSide Bank, Hiram, Georgia
  7. Northway Bank, Berlin, New Hampshire

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.

Comments

  1. I just have to correct you on one thing. In your post you said . . .

    hold off on delivery of the item sold until the cashier’s check clears your bank account.

    The problem with this is that the bank will tell you that the check is clear, or verified, as good within 24 hours but it could take 10 business days for them to find out that it is counterfeit. This is exactly what happend to my husband and I. The bank told us that the check was clear and good . . . no problems . . . so we went forward with the transaction. One week later they called us and told us it was counterfeit and that we were liable for the entire amount.

    Shawn Mosch
    Co-Founder of Scam Victims United

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