Check Scams | WaterStone Bank

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If you have any questions or believe you may have fell victim to a scam, please call our Customer Support Center at (414) 761-1000 or your local branch immediately.

Counterfeit check scams have continued to rise in popularity due to easy access to advanced copying and printing technologies. 

Be aware of the most common check scams that continue to trouble individuals from around the world.

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Types of Check Scams

Lottery Scam

You receive a call, email or letter from a company such as: Megabucks Traveller’s Draw, North American Lottery, Publisher’s Clearing House, etc. stating that you just won a prize or large sum of money and that the enclosed check is to be used to pay taxes on your winnings. You are instructed to deposit the check into your personal account and wire a portion back to the company handling your winnings.

After you wire the money, your bank notifies you that the check deposited is counterfeit and you are responsible for paying back the amount you had withdrawn.

 

Preventative Measures:

  • If it appears too good to be true, it probably is.
  • Be wary if you receive notification of winning a lottery or drawing that you don’t remember entering.
  • Beware of lotteries that require you to pay a fee prior to delivery of your prize.
  • Be cautious when you are asked to send additional money to be eligible for future winnings or that it may increase your odds of winning.
  • Always verify the identity of the person or organization contacting you. Real sweepstakes companies will never contact you directly and ask for money.
  • Playing foreign lottery online, by phone, or mail is a violation of federal law.

Online Shopping Scam

You are selling something on e-bay, craigslist, or Facebook marketplace and are contacted by a buyer that is interested in purchasing your item. The buyer tells you he will send you a check or money order to complete the purchase. You receive the check via mail, but find the check is for more than the selling price. You call the buyer to inform him of his mistake. The buyer asks you to deposit the check and wire him the difference minus a little bonus for your trouble. You deposit the check and send the difference back to the buyer only to discover that the check deposited is counterfeit. You are now responsible for covering the amount withdrawn.

Facebook marketplace is a relatively new online buy and sell platform that also introduces the risk of using person-to-person payment apps or services. You list an item on Facebook marketplace and are contacted quickly by a buyer who is willing to pay using an app such as Zelle, Venmo, or CashApp. Shortly after receiving payment, you get an email from a spoofed address stating that you will need more funds to accept the transfer of the payment. The buyer will then give you the funds and then pressure you into repaying them for the fees they incur on your behalf. No real funds were sent over by the scammer, so if you refund them, you will lose any money sent to them.

 

Preventative Measures:

  • Prior to depositing the check or sending any money, speak to your bank about how and why you received the check.
  • Until the check has been cleared by your bank, never use the money.
  • Do not trust anyone offering to overpay for an item.
  • Never wire money back for an overpayment of an item you are selling.
  • Report suspicious sellers or buyers to the shopping platform immediately.

Mystery Shopper Scam

You decide to answer a help wanted ad or you receive an unsolicited phone call about being a mystery shopper. They tell you that you will be evaluating the customer services of a retailer that sells gift cards, money orders, or wire transfer services such as Western Union and Money Gram. You receive a check and are told to deposit it in your personal bank account and wire the remaining funds back to the 'employer'. 

After you’ve wired the money back to your new 'employer', you find out that the check is counterfeit. You are now responsible for repaying the bank the amount you have withdrawn.

 

Preventative Measures:

  • Be suspicious of a company that sends you a check only to ask you to wire the money back to them.
  • Research the name of the company and check it’s authenticity on the Better Business Bureau’s website.
  • Never use the funds deposited until the bank has confirmed the check has cleared.

Government Grant Scam

You receive a letter, phone call, or email that states you have been approved for a government grant to be used for education, home repair, business expenses, or unpaid bills in a large sum of over $10,000. The check included with the message is meant to be used to pay fees to the appropriate federal institution. The message states you are to deposit the check and wire the money back to the sender.

Once you have wired the money back to the sender, you find out the check is counterfeit. You are now responsible for repaying the bank the amount you have withdrawn.

 

Preventative Measures:

  • Research the company or federal institution that supplied the grant money.
  • Ask yourself: Did I even apply for a grant?
  • Never use the funds deposited until the bank has confirmed the check has cleared.
  • Never wire money back to the sender until the check has cleared.
  • Never give personal information such as your Social Security Number or account number to someone you cannot verify the identity of.

Cashier's Check Scam

A counterfeit cashier's check scam occurs when a customer unknowingly deposits the check into their bank account and then withdraws funds based on their availability schedule. The consumer and banker usually assume that the deposited check is good before the check has cleared the bank it was drawn on due to the official appearance of the check. A deposited check can take several days or weeks to either make its way to the bank it is drawn on for payment, or to be returned unpaid.

Once the bank is informed that a deposited check is counterfeit, it will deduct the amount of the check from the account it was deposited to and the consumer is responsible for any lost funds.

 

Preventative Measures:

  • Independently verify the legitimacy of the financial institution the check is drawn from. Use the internet to get the telephone of the bank and verify the validity of all information listed.
  • Do not rely on deposited money until the funds have been cleared by your bank and the bank it is drawn on.
  • Always speak with a banker before depositing a check you cannot confirm is legitimate.
  • If you have specific questions regarding WaterStone Bank's "Funds Availability Schedule," please visit any branch or call our Customer Support Center.

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