Consumer Alert

Counterfeit Check Scam Warning

The Consumer Protection Unit of the Department of Law warns Alaska consumers of increased reports of counterfeit check scams. The use of counterfeit checks by scammers in Alaska is not new, but the Department of Law has recently noticed an increase in reports of these scams and warns consumers to be on the look out for these phony checks and not be fooled into depositing them.

Counterfeit check scams can come in many different forms, from solicitations to participate in a foreign lottery or sweepstakes, to the sale of items through classified ads or regular business transactions, internet auction transactions, payments for services, and other scams. The common factor in all scams involving a counterfeit check is that you will be asked to cash a check that the scammer provides to you, and wire the scammer back some money that the scammer claims will cover taxes, shipping and handling, or some other cost or fee.

The problem is that even though the check looks legitimate, it is no good. The scammer is just using the transaction or solicitation as a ploy to convince you to deposit the check and wire some or all of the funds to the scammer. If you deposit the check and wire the money, your bank will soon learn that the check is fake, and you will be liable to the bank for the amount of the check, including the funds you wired to the scammer.

If you find yourself in one of these situations, realize that this is likely a counterfeit check scam and don't cash the check. Or, if you do cash the check, don't wire any money to the sender unless and until the check has cleared the bank. Be aware that just because the bank tells you that funds from the check are "available", this does not mean that the check is good or that it has cleared. Under federal law banks are required to make the funds you deposit available quickly, usually within five days, depending on the type of check. It may take weeks for the bank to determine if a check is counterfeit or not.

For more information on counterfeit check scams and how to protect yourself from becoming a victim of the scam, review the Federal Trade Commission's brochure entitled: "Giving the Bounce to Counterfeit Check Scams".

Consumer Protection Unit
April 2008