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Saturday, August 7, 2010

Cashier's Checks are NOT the Same as Cash

Here is a great article on cashier's checks. It is the most common approach when scammers target anyone online, which includes the many artist-targeted scams we report on. Yes, scammers will also avoid this phrase and tell you they will pay with a credit card or even do a direct bank deposit (neither of which you should do - many of the credit cards are stolen and with a direct bank deposit they will get your bank account number). But most of the scammers still say money order or cashier's check (then they'll do something else to try and bypass your gut instinct that something is not right - they will offer to send it overnight via Federal Express).

So the lesson of this article? Cashier's checks are not the same as cash. And there are ways you can determine if the potential buyer is a real buyer and not a scammer.

Counterfeit Cashier’s Checks Continue To Flood The Banking System

The increasing number of counterfeit cashier’s checks flooding the country continues to cause major problems for both banks and consumers.   The FDIC is routinely issuing special alerts on 15 to 40 banks per month that report counterfeit checks bearing their name.

Counterfeit cashier’s checks represent a major risk to consumers who can be held liable by their bank for the full amount of a deposited counterfeit check - see Why You Can’t Trust A Cashier’s Check.

Many consumers assume that a cashier’s check is equivalent to cash.  That belief is now dangerous to your financial health as a tidal wave of counterfeit cashier’s checks are now flooding the country.  The counterfeit cashier checks can be very similar to authentic teller checks.  The average consumer would not be able to detect a counterfeit cashier’s check.  Often times, the depository institution accepting the check is not able to detect counterfeit checks until the check is returned unpaid.

The FDIC has already issued 14 special alerts in August on banking institutions reporting counterfeit cashier’s checks. Counterfeit cashier’s checks bearing the following institution’s names are reportedly in circulation.

    * SA-117-2010: Counterfeit Bank Checks Bearing the Name The Old Fort Banking Company, Bettsville, Ohio, are Reportedly in Circulation
    * SA-116-2010: Counterfeit Treasurer’s Checks Bearing the Name Century Bank, Somerville, Massachusetts, are Reportedly in Circulation
    * SA-115-2010: Counterfeit Cashier’s Checks Bearing the Name American State Bank, Sioux Center, Iowa, are Reportedly in Circulation
    * SA-114-2010: Counterfeit Cashier’s Checks Bearing the Name Empire Bank, Strafford, Missouri, are Reportedly in Circulation
    * SA-113-2010: Counterfeit Official Checks Bearing the Name Bank Mutual, Milwaukee, Wisconsin, are Reportedly in Circulation
    * SA-112-2010: Counterfeit Cashier’s Checks Bearing the Name First Suburban National Bank, Maywood, Illinois, are Reportedly in Circulation
    * SA-111-2010: Counterfeit Cashier’s Checks Bearing the Name O’Bannon Bank, Buffalo, Missouri, are Reportedly in Circulation
    * SA-110-2010: Counterfeit Cashier’s Checks Bearing the Name First National Bank, Selling, Oklahoma, are Reportedly in Circulation
    * SA-109-2010: Counterfeit Cashier’s Checks Bearing the Name Brenham National Bank, Brenham, Texas, are Reportedly in Circulation
    * SA-108-2010: Counterfeit Treasurer Checks Bearing the Name East Cambridge Savings Bank are Reportedly in Circulation
    * SA-107-2010: Counterfeit Cashier’s Checks Bearing the Name MERCO Credit Union, Merced, California, are Reportedly in Circulation
    * SA-106-2010: Counterfeit Official Checks Bearing the Name Corefirst Bank & Trust are Reportedly in Circulation
    * SA-105-2010: Counterfeit Official Checks Bearing the Name Amer Un Svgs & Ln Assoc, Chicago, Illinois, are Reportedly in Circulation
    * SA-104-2010: Counterfeit Cashier’s Checks Bearing the Name Athens Federal Community Bank, Athens, Tennessee, are Reportedly in Circulation

The reason that criminals continue to produce counterfeit cashier’s checks is because the scam works. Many consumers would have doubts about accepting a personal check from a stranger due to the risk that the check would not clear.  It has been a time tested practice to request a cashier’s check for payment to eliminate the risk of a bad check.  Unfortunately, the prevailing belief that all cashier’s checks are as “good as gold” can no longer be relied upon.

If accepting payment in the form of a cashier’s check for the sale of an item, exercise due diligence to avoid potential problems.  Check with your bank on the authenticity of the cashier’s check, or better yet, hold off on delivery of the item sold until the cashier’s check clears your bank account (Note from Stop Art Scams: sometimes the bank WILL clear the check only to remove the funds later when they realize the check is fraudulent - so have a live bank person research it).

How Counterfeit Cashier Check Scam Works

A typical scam using a counterfeit cashier’s check for a purchase usually involves the following ploy.  The purchaser presents to the seller a cashier’s check for more than what is owed and gives some elaborate explanation for why the check exceeds the amount due.  The seller accepting the cashier’s check feels safe, especially since the check exceeds the amount he is due.

The buyer then asks the seller to cash the cashier’s check and immediately forward the overpayment to him.  The con man knows that banks are required to make funds on the first $5,000 of a cashier’s check available to the depositor within one day.   The seller deposits the check and sends the overpayment to the purchaser.  In three to five days, the seller finds out that the cashier’s check was counterfeit and that his account has been debited to make restitution on the counterfeit check.

Consumer Vigilance Essential - How To Tell If You Are Being Scammed

Ohio Valley Bank, which has previously reported counterfeit checks bearing its name, has the following good advice for consumers.

If you can answer “YES” to any of the following questions, you could be involved in a FRAUD or about to be SCAMMED

* Is the CHECK from an item you sold on the internet, such as a car, boat, jewelry, etc.?
* Is the amount of the CHECK more than the item’s selling price?
* Did you receive the CHECK via an overnight delivery service?
* Is the CHECK connected to communicating with someone by email?
* Is the CHECK drawn on a business or individual account that is different from the person buying your item or product?
* Have you been informed that you were the winner of a LOTTERY, such as Canadian, Australian, El Gordo, or El Mundo, that you did not enter?
* Have you been instructed to either “WIRE”, “SEND” OR “SHIP” MONEY, as soon as possible, to a large U.S. city or to another country, such as Canada, England, or Nigeria?
* Have you been asked to PAY money to receive a deposit from another country such as Canada, England, or Nigeria?
* Are you receiving PAY or a COMMISSION of facilitating money transfers through your account?

Report Fraud To FDIC

Information about counterfeit items, cyber-fraud incidents and other fraudulent activity may be forwarded to the FDIC’s Cyber-Fraud and Financial Crimes Section, 550 17th Street, N.W., Room F-4004, Washington, D.C. 20429, or transmitted electronically to 'alert [at sign]'.


  1. Thank you so much for writing this post! Someone just tried to run this scam on me until I Googled the likelihood of check fraud for artists selling work online!

  2. Yea i just got a cashier's check via usps and just received the instructions to deposit into my account. I knew it was fishy and would never do something this stupid

  3. I applied for a warehouse assistant job to someone who was offering such a job on craigslist. Now they contacted me and sent a cashiers check. With a story they're establishing a company and i'm being sent a check for $1,910.00 i am to cash it deduct $350.00 from it and get a cashiers check and send the rest to someone in Texas who is said to be the buyer of the company for the home decorating materials. Which the company is supposed to be established as a home decorating supply company. I feel it's fake and i'm glad i did research on cashiers checks so i don't fall victim to a scam. I think more about it and felt it was a scam since i originally applied for a warehouse worker position and was offered to be a warehouse assistant. Looking at examples of duties of warehouse assistants i have no experience doing that and looking at examples of what qualifies a person for such position i do not qualify for it.

  4. I also received a cashier check from texas & lucky the bank will verify if it's real or fake? Since I read this post I also got a email from bobby visak or something? An he never replied back to my email? So I though think this a scam fraud big time.! Lucky my bank said it will take 2 weeks to verify & clear it out? I told the teller that don't bother with it? I will throw it away! It's too suspicious ain't it.!

  5. I don't understand where the scammers think the money to transfer is gonna come from? I don't think if I deposited a fake check my bank would give me the amount in cash without looking at the check first. Do they expect you to cash it and wire money or deposit it and wire money. Its all very confusing

  6. Yes, the scammers are counting on the delay between when you deposit their fake money and when the bank realizes it and withdraws it back again - in the meantime if you have wired them money it is not against their fake money but against your good money. And wiring is as good as cash and pretty untraceable so they will pick it up quickly and then disappear, to move on to the next victim.

    Unfortunately it is a successful scam and that is why I started the blog and Facebook page - to warn people and hopefully somewhat reduce the effectiveness of this scam.

  7. has anyone ever received a check with the remitter name Erica Diamond