The story is very familiar.
You fill out some form online or answer some ads. The company, usually with very official letterhead, mails you a massive check of a few thousand bucks. You're told to deposit the check, buy hundreds or thousands of dollars in gift cards, take photos of them and email them back, and keep the change as your fee. You need to write up your experience as part of the “job.”
It sounds safe enough. You deposit the check, the funds are available in a day, and you go do your job. Except after a few days, the check will bounce, the bank will take back the funds, and now you're out the money you spent.
It's happened over and over and over again.
Here are two real-life examples and then how you can prevent it.
Why This Scam Tricks So Many People
When you deposit an official check (U.S. Treasury, government checks, bank checks like cashier's checks, certified checks and teller's checks), under Federal law the bank must make the funds available to you in one business day.
For unofficial checks (personal, business), banks must make the first $200 available after one business day and the rest after another day.
That doesn't mean the check has cleared!
The funds are available but the bank has not confirmed that the checks are good. That can take several days to several weeks. Until the bank confirms it, you are responsible.
That's what scammers take advantage of in the system. You deposit the check, federal law says the bank must give you access to the funds (even though the bank hasn't received them), and you spend money that will get (rightfully) clawed back.
That's why all the checks will be “official” checks (cashier's check, etc.) and not a business check, like from a mystery shopping company.
What Does This Scam Look Like in Real Life?
After seeing two real-life examples, it's astounding how much information is on these “cashier's checks,” in quotes because they are not real.
A cashier's check from a bank is very austere. These checks are chock full of crap.
A cashier's check will not have the “purchaser” because there is no purchaser, the check is technically from the bank itself. It also won't list an issuer location, like Walmart or MoneyGram, because the bank issues it.
That alone is a red flag (besides the fact that a stranger sent you thousands of dollars on the hopes you won't just run with it) but that's only if you're familiar with cashier's checks.
Let's look at two real-life examples…
Mystery Shopping Scam #1
A reader recently emailed me because they were recruited by a mystery shopping company. At least they thought they were.
They were researching the company and found my post about mystery shopping scams, saw the company they were working with on my list of OK companies, but still felt suspicious (good!).
It turns out, anyone can copy a logo, get a Google Voice number that matches the area code, and pretend to be an employee of that company. In this case, they pretended to be an employee of About Face, an Atlanta-based mystery shopping company listed in the MSPA, the Mystery Shopping Providers Association.
She sent me a photo of the check and the very official-looking letter.
First, the massive size of the check is a classic check overpayment scam. You see this with Craigslist a ton. You're selling a thneed for like $500 and someone says “oh here's a $3,250 check some other jabroni sent me but I can't cash it, can you cash it, give me the thneed and the extra cash, and keep another $100 for yourself.” Or some BS like that.
(it's BS because anyone can cash a cashier's check, it's an official bank check!)
Besides the large amount, the check also says issued by Moneygram Payment Systems (huh?) and then Drawee says BOKF, NA, Eufaula, OK. It seems strange right?
What convinced me it was a fraud was the ABA routing number. 103100551 doesn't match the name of the bank on the check. 103100551 matches Bank of Oklahoma, A Division of BOKF, National Association but the check was from “Jordan Credit Union.” (look up ABA numbers here)
BOKF is what it says under Drawee… so is the check from Jordan Credit Union or BOKF? But it's an official check issued by Moneygram, it says so right there!
If you even believe that Jordan Credit Union is real (which I am not), you could check the NCUA.gov website though it would be hard to confirm since the check has no address (another reddish flag). There is a Jordan Credit Union located in Utah and it shares the same logo… but why would an Atlanta based company use a credit union in Utah? (and their ABA routing number is 324379705, not 103100551)
The answer …. is that they wouldn't. Nor would they use Moneygram when they can just write you a business check for free.
But a scammer would set it up this way because of how checks are processed.
Mystery Shopping Scam #2
This one is purportedly from Target, here is the check and the letter.
What is fishy about this one? A lot.
The first suspicious thing is that email correspondence will be with [email protected] — not something Target would do. I mean seriously… you have to do better than that.
You can also Google the phone number, 585-391-0687, to see if there are any reports of fraud… I found at least one on AngryCitizen.com:
If this wasn't enough to trigger your internal fraud alarm to stay away, here's a look at the ABA number.
The ABA routing number (314972853) does match Woodforest National Bank but not the one in Texas. In Texas, they use 113008465 (except for their branch in Refugio, Texas).
Not good. Check bad.
Massive Red Flags for This Scam
Here's what I look for:
- A high dollar check – Why would they pay you thousands of dollars just to have you spend it on thousands of dollars in gift cards, money orders, etc? They give you $3,000 and have you spend $2,700 and keep $300? They wouldn't because that would be insane. That's probably why you found this page in the first place.
- Using a cashier's check or money order – If you were a big business and did these reviews constantly, why would you pay the fee to get a money order or cashier's check? You can just as easily cut a regular check. Except there are no laws that require a regular check to clear in a single day, which is the loophole scammers use.
- They use a free email account – A reputable company can get an email address that matches their name and not one from Gmail, Yahoo, Hotmail, Outlook, etc.
- Check the ABA routing number – The scam relies on a bad check but one that takes more than a day to confirm, so an ABA routing number that is real but doesn't match the bank is one great way to fool the system for a little while.
- You can always call the bank to verify the check – OK let's say you do as much research as you can, everything appears 100% legitimate, and you don't believe me when I say sending a $3,000 check for a $3000 is fishy… you can the bank's check verification services for confirmation. Don't call a number on the check, look up the bank online and call that.
- Did it come by UPS or FedEx? This is more of a light red flag but scammers use these services because if they sent it by the United States Postal Service, it's mail fraud. Mail fraud is a federal offense.
Last but not least, if you aren't sure… use my foolproof anti-scam strategy: ask five friends. They'll set you straight.
What Should I Do With The Fake Check?
If you think it's fake, it's time to report it to the proper authorities.
You should report your fake check to the authorities by:
- Filing a complaint with the FTC using the FTC Complaint Assistant.
- Calling your local FBI field office to see if they want to investigate.
- Reporting it to your local postmaster (more information from the USPS)
- Reporting it to your attorney general, find your local AG.
They will investigate it and, hopefully, catch the scammer or scam ring.