Fake check scams cause big losses for consumers in their 20s
A new data report from the Federal Trade Commission shows that consumers in their twenties are more than twice as likely as people 30 and older to report losing money to fake check scams.
Fake checks drive many types of scams — like those involving phony job and income opportunities, online classified ad sales, and others. These types of scams led to reported individual median losses of nearly $2,000 – losses far higher than on any other of the top ten scams reported to the FTC.
In a fake check scam, a person you don’t know asks you to deposit a check – sometimes for several thousand dollars and usually for more than you are owed — and send some of the money back, often by wire transfers or gift cards, to them or another person.
The scammers always have a good story to explain the overpayment. They might say they’re stuck out of the country, they need you to cover taxes or fees, you’ll need to buy supplies, or something else.
If it's fake, why is money showing in my bank?
By law, banks have to make deposited funds available quickly — so victims usually see the money in their bank account within a day or two. But it may take weeks for the bank to learn the check was bad. By that time, the scammer has the money sent by the victim, who is then stuck paying the bank back.
The FTC reports that consumers lost more than $28 million to fake check scams in 2019 alone.
The analysis also shows that younger consumers in their twenties are often contacted by scammers directly through their college and university email accounts with messages made to look like official school communications.
Learn more about fake check scams at ftc.gov/fakechecks. Consumers can report fake check scams at ftc.gov/complaint.
Information provided by the Federal Trade Commission.