Beware of Fake Check Scams
Update: Fake checks purported to be issued by FINRA appear to be back in circulation in 2019. FINRA fielded two calls in late February from individuals who received unexpected "FINRA" checks. The checks are counterfeit, and may arrive by special delivery and require a recipient's signature. The arrival of these checks may be linked to job search scams, though some past callers noted that there appeared to be no direct reference to a job search relationship accompanying the mailing—just a check out of the blue. We are updating and reissuing this alert to reiterate the risks of cashing unexpected checks and offer tips to avoid being a check scam victim.
We are warning the public about job-search scams in which people who respond to ads or online job postings receive checks that appear to be from legitimate companies—including FINRA. The type of job can vary—models, mystery shoppers, data entry personnel or some other type of independent worker. But one element is always the same: In each of these scams, you are sent an authentic-looking check.
In many instances, these fake checks will feature the name of a real company—although often not the company that purportedly hired you, which should be your first red flag. They also might use real account and routing numbers. In the most common version of this scam, the sender instructs you to deposit the check into your bank account and then almost immediately transfer a portion of the money to someone else. That's your second red flag. Days later, your bank informs you that the check was counterfeit and that you are liable for the amount withdrawn, usually several thousand dollars.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—and there is usually no way to recover the money you sent to a third party.
We are aware that fraudsters behind some of these scams have created fake FINRA and "NASD Regulations" checks. (The latter entity does not exist, although 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. If you receive a check from FINRA, do not cash it—unless you have a current business relationship with FINRA. Call (301) 590-6500, and speak with a FINRA staff member.
Read on for a deeper dive into different forms of this scam—and for six steps to protect yourself.
Unexpected Check Scam
Simply put, you receive a check out of the blue, perhaps by registered mail or other delivery method that requires a signature. No instructions accompany the check—but FINRA suspects that once you deposit the check, you may further entangle yourself with the fraudster. For example, you might be liable for the amount of the counterfeit check, your endorsement might give your account information to fraudsters, or you could receive follow-up attempts to phish for personal financial information—or some combination.
While it is possible that an event triggers the delivery of a "surprise" check—for example, you might have applied for a job with the company or responded to an online merchandise posting—a handful of potential victims who received fake FINRA checks and called us to ask why said they neither suspected nor recalled such an interaction.
Mystery Shopping Scam
Fraudsters lure victims by posting ads for mystery shoppers in job classifieds, such as on the popular website Craigslist. 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.
Typically this scam starts 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:
- Look for the unusual. Always question why you got the check, and whether everything lines up. In one version of this scam, a bogus check appeared to be issued by FINRA, but was related to a job from another company. Both organizations were real, but there was no connection between the two. When in doubt, call one or both companies using phone numbers you researched.
- Don't cash the "unexpected" check. Companies, including FINRA, rarely if ever send checks that don't include some explanation of why the check was issued. Unless you are expecting the check—and you are absolutely certain it is meant for you—do not cash it.
- 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.
- Check the sender's methods of communication. Legitimate businesses rarely communicate exclusively through social media or messaging apps, and hiring managers and executives of those companies generally do not use personal email accounts (e.g., Gmail or Hotmail) for business purposes.
- 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 at the company. 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, texts 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. Until you have verified with your bank that the check has cleared—do not wire or transfer funds.
Where to Turn for Help
FINRA urges victims of fake check scams to contact one of the following organizations right away:
- Your local police
- The Internet Crime Complaint Center (a partnership between the FBI and the National White Collar Crime Center)
- The U.S. Postal Inspections Service (if the check arrived by U.S. mail)