Fraud Flash: Check Scams
Overpayment scams, also known as check scams, are targeting small businesses. Although not new, the scam has evolved towards targeting small- to medium-sized businesses instead of just individuals.
How it works
In check scams that target businesses, the scammer typically expresses interest in goods or services the business is selling through email. The scammer will agree to make a purchase and send a fake bank cashier’s check for payment. In most cases, the check exceeds the amount of the purchase and the victim is often convinced they will need to wire the excess funds back to the scammer or that the amount on the check was issued by mistake. Once the funds are wired, the check eventually bounces, leaving the victim to pay the entire amount.
Protect yourself and your business
There are multiple things you can do to protect yourself and your business from these scammers.
- Use extreme caution when working with unknown buyers who only communicate by email and are quick to make a purchase.
- Never wire funds back to the buyer for any reason.
- Don’t accept a check for more than the selling price.
- If you do accept payment by check, ask for a check drawn on a local bank, or a bank with a local branch.
- Suggest alternative ways for the buyer to pay, such as an escrow service or online payment service.
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If you think you’re a victim
If you think you’ve been targeted by a check scam, report it to these agencies: