How to Protect Yourself From Check Scams and Identity Theft

Date: September 22nd, 2008 - Author: University Credit Union

Criminals are becoming smarter and more efficient at fraud and at stealing personal information. Protecting yourself from these criminals is essential in today's financial world. Below are some common questions and tips to help you avoid fraud. For more information on protecting yourself from Identity Theft, visit the Federal Trade Commisions Identity Theft Site.

Fake check scams are clever ploys designed to steal your money.�New technology has made it easy for criminals to manipulate checks in a way to deceive victims into exchanging them for their money. You could avoid becoming a victim by recognizing how the scam works and understanding your responsibility for the checks that you deposit in your account.

How do check scammers find their victims?
They hunt for them by scanning newspaper and online advertisements for people listing items for sale, and checking postings on online job sites from people seeking employment. They place their own ads with phone numbers or email addresses for people to contact them. And they call or send email or faxes to people randomly, knowing that some will take the bait.

How can I protect myself from fake check scams?
There is no legitimate reason for someone who is giving you money to ask you to wire money back - that is a clear sign of a scam. If a stranger wants to send you a check, insist on a cashiers check for the exact amount, preferably from a credit union or a bank with a branch in your area.

Know who you are dealing with. In any transaction, independently confirm the buyer's name, street address, and telephone number.

Don't accept a check for more than�the selling price, no matter how tempting. Ask the buyer to write the check for the correct amount. If the buyer refuses to send the correct amount, return the check. Don't send the merchandise.

Consider an alternative method of payment. As a seller, you can suggest an escrow service or online payment service. There may be a charge for an escrow service. If the buyer insists on using a particular escrow or online payment service you've never heard of, check it out. Visit its website, and read its terms of agreement and privacy policy. Call the customer service line. If there isn't one or if you call and can't get answers about the service's reliability, don't use the service. To lean more about escrow services and online payment systems, visit www.ftc.gov/onlineshopping.

If you accept payment by check, ask for a check drawn on a local financial institution with a local branch. That way, you can make a personal visit to make sure the check is valid. If that's not possible, call the financial institution where it was purchases and ask if the check is valid. Get the financial institution's phone number from directory assistance or an internet site that you know and trust, not from the person who gave you the check.

If the buyer insists that you wire back funds, end the transaction immediately. There is no legitimate reason for someone who is giving you money to ask you to wire money back. Legitimate buyers don't pressure you to send money by Western Union or a similar company. In addition, you have little recourse if there's a problem with a wire transaction.

Resist any pressure to "act now." If the buyer's offer is good now, it should be good after the check clears the issuing bank.

Throw away any offer that asks you to pay for the prize or a gift. If it's free or a gift, you shouldn't have to pay for it. Free is free.

Resist the urge to enter foreign lotteries. Most foreign lottery solicitations are phony. What's more, it's illegal to play a foreign lottery through the mail or the telephone.

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