Beware of Fake Check Scams

We are issuing this Alert to warn the public about "mystery shopper" and "modeling" scams using checks that appear to be from legitimate companies—including FINRA.

 

In each of these scams, you are sent an authentic-looking check. In many instances, the name of a real company appears on the check as well as real account and routing numbers. You are instructed to deposit the check in your bank account and then transfer a portion of the money to someone else. Days later, your bank informs you that the check was counterfeit and that you are liable for the amount withdrawn, usually several thousand dollars. You’ve been scammed.

 

We are aware that fraudsters behind some of these scams have created fake FINRA and "NASD Regulations" [sic] checks. (NASD Regulation was a subsidiary of FINRA's predecessor, NASD.) Because it can be very difficult to tell a real check from a counterfeit one, we are urging consumers to be cautious if someone they don't know asks them to cash a check and then transfer the money.

 

This Alert describes two fake check scams that we’ve identified, offers tips on avoiding these types of frauds, and tells you where to turn for help if you are a victim of one of these scams.

 

Mystery Shopping Scam

 

Fraudsters lure victims by posting ads for mystery shoppers in job classifieds, such as on the popular Web site Craigslist (www.craigslist.org). When victims respond to the ads, they are led to believe that they have been hired as mystery shoppers to evaluate the services of money transfer companies, such as MoneyGram. Victims are then sent checks that appear to be from legitimate companies—including FINRA—and instructed to deposit the checks in their bank accounts, then withdraw most of the money and wire it to someone else—often a purported fellow mystery shopper. Victims are told to keep several hundred dollars of the money as payment. When the checks are later discovered to be phony, the banks reverse the deposit and the victims are left liable for the money withdrawn, usually several thousand dollars.

 

Modeling Scam

 

Typically this scam starts out with a victim responding to an online posting—or the victim may have posted information online, such as with a modeling clearing house. Either way, the victim eventually gets "hired" by the fraudsters to model and receives an email with instructions. Similar to the mystery shopping scam, the victim then receives a legitimate looking check and is told to cash the check, wire some portion of the proceeds to a third party—such as a “supervising crew”—and keep the remainder as payment.

 

How can I protect myself?

 

To avoid fake check scams, follow these tips:

 

  • Don’t “keep the change.” No legitimate company will overpay you and ask that you wire the difference back to the company or to some third party. Be extremely wary of any offer—in any context—to accept a check or money order in an amount greater than you are owed.

  • Call the company directly to verify the check. Remember that some fake checks will have a legitimate company’s actual account number with the correct bank routing number. Call the company directly to verify the check, using a telephone number you obtain on your own from directory assistance. Do not use any telephone number that appears on the check or in any instructions you receive. For FINRA checks, call (301) 590-6500.

  • Know the hallmarks of fraud. Fake check scams typically have a number of red flags, such as:
    • Typos: Watch out for online postings or emails that are riddled with typos and poor grammar.

    • Mismatched names: Compare the name of the person or company posting the opportunity with the name on the check you receive—and beware if they don’t match.

    • Pressure to act quickly: Be aware that it can take 10 days or even more for your bank to determine that a check is counterfeit. Don’t wire or transfer funds until you have verified with your bank that the check has cleared—even if the bank allows you to withdraw the money sooner.

 

Where to Turn for Help

 

FINRA urges victims of fake check scams to contact one of the following organizations right away:

 

Resources

 

 

Last Updated: 7/15/2009