Counterfeit Checks Among Top Ten Consumer Complaints To FTC

That official looking bank check you receive in return for the sale of goods or services might actually be worthless.  The con men and criminals producing counterfeit bank checks has prompted the FDIC to issue numerous warnings about specific banks that have reported counterfeit checks drawn in their name.

The FDIC has noticed explosive growth in counterfeit cashier’s checks, money orders, business and personal checks.  The advances in printing technology and the increase in internet transactions has made the use of counterfeit checks a fast growing and profitable endeavor for criminals. (See Why You Can’t Trust A Cashier’s Check).

Although counterfeit checks cause headaches for the banking industry, the biggest risk of loss is to the consumer accepting and depositing a counterfeit check.  It is the depositor’s responsibility to verify that a check is good.  Unfortunately, consumers are losing substantial amounts of money by discovering only weeks later that they sold or shipped merchandise in return for a worthless check.

A bank customer who deposits a counterfeit check and withdraws funds before the check clears will be held fully responsible for the loss by the bank.  Federal regulations require that funds from deposited checks be made available for withdrawal within one to five business days, while a bank may not discover that the depositor’s check is counterfeit for a couple of weeks.

The Federal Trade Commission (FTC) is the agency that tries to protect consumers against deceptive, unfair or fraudulent practices. During 2010, complaints about counterfeit check scams rated number 8 among the top ten consumer complaints to the FTC.

Top Consumer Complaints To FTC

The most recent special alerts for March from the FDIC identifies the following banks that reported counterfeit checks bearing the institution’s name.

  • SA-15-2011: Counterfeit Cashier’s Checks Bearing the Name Lincoln Savings Bank, Reinbeck, Iowa, are Reportedly in Circulation
  • SA-14-2011: Counterfeit Cashier’s Checks Bearing the Name First Savings Bank, El Paso, Texas, are Reportedly in Circulation
  • SA-13-2011: Counterfeit Cashier’s Checks Bearing the Name First California Bank, Beverly Hills, California, are Reportedly in Circulation
  • SA-12-2011: Counterfeit Cashier’s Checks Bearing the Name CommunityAmerica Credit Union, Lenexa, Kansas, are Reportedly in Circulation
  • SA-11-2011: Counterfeit Cashier’s Checks Bearing the Name American Security Bank are Reportedly in Circulation
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