Beware of the Check-Cashing Scam

Working as a secret shopper, being paid to have your car wrapped with a company logo, and winning the lottery all have one thing in common—they are all tactics scammers are using to try to steal your hard-earned money.

Although overall FTC fraud complaints have declined slightly since 2016, from 2.98 to 2.68 million, Alabama is ranked 8th in the country for fraud reports per capita. A check-cashing scam is a major part of this problem.

The scams have been increasing in complexity. Even though they are typically run by people living overseas, scammers have gone a step further and begun employing US residents as “mules” to help carry out their scams.

Can I Be Responsible for a Check-Cashing Scam?

Every check-cashing scam works from the same basic angle. First, the scammer sends you a bogus check that includes a payment to you and additional funds you’re supposed to pay to a third party (usually via wire transfer). Then you deposit the check at your bank, keep your allotted portion of the money, and unwittingly send the rest back to the scammer.

The only part of the check-cashing scam that really changes is how you send the money back to the scammer. For example, the secret shopper scam involves you taking the money from the fake check, visiting a store, and sending the money to the scammer to “test the store’s wire transfer system.”

You may be thinking “but if the check has cleared, then what’s the risk to me?” Even though funds from the check may be available to you immediately, it usually takes a couple of weeks before the check clears. If the check bounces, then you are responsible for reimbursing the full amount of the check to the bank. Not only are you out the time you wasted, but you are also out of pocket any money you wired to the scammer.

Can Your Bank Deduct Funds from Your Account to Settle Their Debts?

This may come as a surprise, but if you owe your bank money, the bank is allowed to collect that money from any account you have with them—even if the money is owed on a completely separate account. This is called a “setoff.” Setoffs commonly occur if you are behind on a loan payment or owe fees from another account with the same bank

Contact a Trusted Attorney if You've Been a Victim of a Check-Cashing Scam

If you are experiencing problems with your bank account being overdrawn or if your bank is “setting off” against your bank accounts because you've been a victim of a check-cashing scam, please contact one of our locations nearest you in Alabama, Mississippi or Tennessee for a free, confidential consultation with one of our experienced, licensed attorneys.