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Fraudulent Cashier’s Checks

Fraudulent Cashier’s Checks

Safety and Cashier’s Check Fraud

Cashier’s checks are generally considered safe because when they are authentic, the funds are guaranteed.  However, cashier’s checks are less safe now than in years past. If you don’t know the person paying you with a cashier’s check, you should not assume that their cashier’s check is guaranteed.

A Typical Cashier’s Check Scam

Always be wary of someone who wants to pay more than is agreed upon:

The most common cashier’s check scam involves an “over-payment.”  You receive a cashier’s check for more than was required, and the sender encourages you to deposit the check as it is and send the over-payment amount back to them.

Then the original cashier’s check bounces, you don’t receive the funds in your account, and you’ve already sent the over-payment money back to the sender.

How Cashier’s Checks Bounce

Just because the money appears to be available in your account, it doesn’t mean that the check has cleared and is legitimate.

Credit unions and banks are required by Federal rules to make deposits “available” to consumers quickly, often in 1-2 business days or more.  However, the actual clearing process takes a lot longer, and fraud may not be discovered for a week or more after funds are made available to you. This can lead to the bank taking the money back from your account.

If you do deposit a cashier’s check, you should wait until it has cleared (posted, not “pending”) before spending or withdrawing any funds. Otherwise, you’ll be liable for the full amount of the check and resulting fees.

Protect Yourself

(1) Never accept a check for more than is due.

(2) Call the issuing credit union or bank to verify the check’s authenticity and to verify funds. Do not use the phone number provided with the cashier’s check.  Use the internet to find the real phone number for the financial institution.

(3) Before you deposit a suspicious check, speak with a manager at your credit union or bank. Explain the situation and ask when you can be 100 percent certain that the payment is good.

 

A good rule is simply to never accept cashier’s checks from people you don’t know.