There are two basic types of Checks Scams you need to be aware of. They are two variations of the same theme, and they will have all have the same signals to watch out for.

Check Overpayment Scams

“Check overpayment” scams target people selling cars, other valuable items, or even rooms for rent through classified ads or online auction sites. Unsuspecting sellers get stuck with a big loss when scammers pass off bogus or counterfeit: cashier’s checks, corporate checks, postal money orders or personal checks.

A check overpayment scam begins when a scam artist replies to the classified ad or auction posting and offers to purchase the item for sale with a check, then comes up with a reason for writing the check for more than the purchase price for the item. The scammer asks the member to immediately wire, money order or western union back the difference after the check is deposited. Due to the fact that it can take seven days or longer before the Credit Union knows the check is fraudulent and the check bounces, the scammer is long gone, leaving the member liable for the entire amount. The scam is able to progress because, though the checks are counterfeit, they often look legitimate enough to fdeceive Credit Union tellers.

In another version of the scam, a member receives a letter or phone call that claims they have won a large cash prize from a foreign lottery; usually Canada, England or Nigeria. They are then sent a fraudulent check for their winnings and are asked to immediately pay taxes or fees on “foreign lottery winnings.” As in the above case the check bounces and the member is left liable for the entire amount.

The FTC offers the following advice for consumers: throw away any offer that asks you to pay for a prize or “free” gift; and do not enter foreign lotteries - most solicitations for them are fraudulent, and it is illegal to play a foreign lottery through the mail or by telephone.

Tips to Avoid Check Overpayment Scams:

• Know who you are dealing with - independently confirm your buyer’s name, street address, and telephone number.
• Never accept a check for more than your selling price.
• Never agree to wire back funds to a buyer - a legitimate buyer will not pressure you to do so, and you have limited recourse if there is a problem with a wire transfer.
• Resist pressure to “act now.” If the buyer’s offer is good now, it should be good when the check clears.
• If you accept payment by check, ask for a check drawn on a local bank or a bank with a local branch. You can visit that bank branch to determine if the check is legitimate.
• Consider an alternative method of payment, such as wire or online payment service. If the buyer wants to use a service you have not heard of, be sure to check it out to be sure it is reliable - check its Web site, call its customer service hotline, and read its terms of agreement and privacy policy. If you do not feel comfortable with the service, do not use it.
  

For your protection SFCU staff may ask you a few simple questions when depositing a Cashier Check or Money Order.

Possible Questions we'll ask when you make a Deposit:

• Is this check for something that you have recently advertised over the Internet?
• Is the check for more than the selling price?
• Have you been asked to wire, Western Union or otherwise return any portion of these back to the buyer/sender?
• If you answer yes to any of the questions, we may be able to help you verify the validity of the check you are presenting.
  

Members who have been victims of check overpayment scams should file a complaint with the Federal Trade Commission. For more information on buying or selling goods on Internet auction sites or to file a complaint in English or Spanish, visit the Federal Trade Commission website or call toll-free, 1-877-FTC-HELP (1-877-382-4357).