In the third week of our consumer fraud series, we are going to talk about what is known as cashier’s check fraud. This form of fraud is becoming increasingly prevalent due to the length of time it can take for a bank to determine that a cashier’s check is fraudulent.
Because funds from the deposited check are often quickly available, a consumer has the time to withdraw the funds and send them to a scammer, or otherwise spend them prior to being alerted. Once the fraud is detected, the amount of the check is then charged back to the consumer’s account, and they are responsible for the full amount.
There are a couple of scenarios where this type of fraud can take place. One of them is by selling items on the internet. Imagine that you sold a product to a consumer online. The consumer agrees to pay for it by mailing you a cashier’s check. Once you receive the check, you then deposit it in your bank account, and immediately ship the product to your customer. Three weeks later, you receive a telephone call from your bank explaining that the cashier’s check you deposited was fraudulent, and they have deducted those funds from your account.
As we discussed last week, scammers are often master graphic artists. Just as they can build a replicated website or online image, they may often be skilled in producing counterfeit currency and checks. A general rule of thumb is to never ship or disburse products or money until the payment made by a consumer has cleared your bank account.