It seems to good to be true. An out-of-state buyer wants to buy your car or other item from Craigslist sight unseen for the full asking price and offers to send a certified check. The buyer can’t meet you or talk to you on the phone because he or she is working on a ship or oil rig, is temporarily out of the country, or claims to be deaf.
Or maybe you got a job offer to be a mystery shopper and make hundreds of dollars per assignment, with your first assignment pre-paid. You might even have gotten a bite on the apartment or house you listed for rent. The prospective tenant offers to send you the deposit and first month’s rent without even looking at the place.
These are just a few of the common scams that use phony checks to rip people off and plunge them into debt. In the six years I’ve been writing about personal finance, I’ve seen reports of this scam skyrocket. The Federal Trade Commission has been warning about such scams since 2004, and they’re still on the Better Business Bureau’s top 10 scam list for 2012. They were also the number one scam reported to the National Consumer League in 2012.
The scammer sends a certified check that’s actually a very well-crafted fake. You probably won’t get to talk to the person, who’ll have a variety of reasons why you can’t talk or meet in person. The real reason is that he or she is probably in Nigeria or another foreign country, and the accent would be a dead giveaway.
The way the scam works is that you cash the check and send money back to the scammer for a variety of reasons. In the Craigslist scam, the supposed buyer will overpay and claim it was a mistake or that money for shipping is included in the check’s total. You’re instructed to wire the overage back via a wire service like Western Union or to send the shipping fee to a supposed shipper, who’s really an accomplice.
The check will eventually be returned and the full amount deducted from your bank account. You’re responsible for repaying it to the bank, and your credit will be ruined if you don’t have enough money to do so. You can be arrested for passing a fake check, even if you didn’t know you were being scammed.
Other scams work in a similar way. In the mystery shopper scam, you’re told to deduct your pay from the check and wire the rest of the money to a designated person to test Western Union’s customer service. In the rental scam, you get an overpayment and are asked to wire the extra money to a mover as a favor to your new tenant. Of course, it’s really a person who’s in on the scam.
If you’ve been victimized by an online scammer pulling one of these tricks, report it to the Internet Crime Complaint Center. Unfortunately, it’s very unlikely you’ll get any of your money back because most of the scammers are safely overseas.
The best way to protect yourself is to never, ever accept a check from someone you don’t know personally. That means anyone you’ve never met face to face. You don’t “know” someone just because you’ve emailed or texted them, or even seen their Facebook page. Some scammers will even send you a copy of “their” drivers license, which is, of course, stolen. If the person won’t meet you, don’t go through with the transaction.
In the case of jobs, it’s common sense that no one will hire you without a proper interview. Scammers often use names of legitimate secret shopping companies, but their email messages come from free services like Yahoo or Gmail. The messages are usually riddled with errors, although some con artists are getting more sophisticated and sending well-crafted, convincing messages. If the job involves cashing a check and wiring money, don’t get involved.
Sure, it’s tempting to believe that someone wants to hire you or buy your item or move into your rental unit, but don’t let that excitement blind you to a scam. If you receive a check and the person wants you to wire money for any reason, tear it up or suffer the financial consequences.