Five Ways to Protect Yourself from a Check Scam While Selling Expensive Items

HARRISBURG, Pa., Dec. 7, 2017 /PRNewswire-USNewswire/ -- During the holiday season, some consumers seek to earn a few extra shopping dollars by selling an expensive item, such as an automobile, electronics, or perhaps a turtle dove or two, but Secretary of Banking and Securities Robin L. Wiessmann warns consumers to avoid the "Counterfeit Cashier's Check Scam."

Secretary explains how this scam works:

• This scam targets individuals selling expensive items through classified advertising or online auctions.
• The counterfeiter, who is often in another country, poses as an interested buyer and offers to pay with a fake cashier's check. After the victim presents the fake check to the bank, the buyer suddenly backs out of the deal and asks for a refund. Because the funds from the check are available from the bank after a few days, the victim assumes the check has cleared and agrees to return the money.
• By the time the bank discovers the forgery – which could be up to 60 days later -- the bogus buyer is long gone and the victim must now repay the bank for the amount of the fake cashier's check.
• In other cases, the counterfeiter may send a cashier's check for more than the asking price of the item and then ask the victim to wire the "overpayment" back or to a third party.

"There was a time when cashier's checks were considered the next best thing to cash," Wiessmann said. "Today, sophisticated forgeries of this once trusted payment method are being used to bilk private sellers out of large sums of money, and consumers need to be vigilant about the people with whom they are doing business."

Wiessmann points to five tips that can help consumers avoid being robbed by the counterfeit cashier's check scam:

1. Understand that although the bank may allow you to withdraw money soon after depositing a cashier's check, that does not mean the check has cleared.
2. You are responsible for the funds you deposit until your bank has received the money from the institution where the check originated or the true account holder of the originating check reports the fraud (this could take more than 60 days).
3. Be cautious of transactions with strangers who pay with cashier's checks. Make sure to tell the buyer that you will send the item only after the check has cleared.
4. Avoid any situation where someone overpays for an item and demands that the extra money be returned.
5. Contact the issuing financial institution to verify the check is authentic, being careful not to rely on the contact information printed on the check itself as it may be false. They may be able to more reliably detect a fraudulent check. 

As part of the department's "Holiday Scam Protection Week," Wiessmann urges consumers to be informed. Know the "red flags" of scams and fraud and who you can contact if you believe you are a victim. Check out the publication: "Scams: Protect Yourself. Protect Your Money" www.dobs.pa.gov/Documents/Publications/Brochures/Scams%20Booklet.pdf

"Although scams may take different forms, the underlying method is often the same: preying on emotions, circumstances, or lack of knowledge to take financial advantage of another party," Secretary Wiessmann added. "Consumers and businesses cannot afford to take every financial opportunity or transaction at face value. This holiday season, everyone is going to have to be more diligent and investigate before investing their money or sharing personal or financial information."

Anyone can contact the Department of Banking and Securities at 1-800-PA-BANKS or 1-800-600-0007 to ask questions or file complaints about financial transactions, companies, or products. Members of the public are also invited to connect to the department through Facebook and Twitter, or subscribing to the department's newsletter.

Media contact: Ed Novak, 717-783-4721

SOURCE Pennsylvania Department of Banking and Securities

Related Links

http://www.state.pa.us