Even though fewer people use paper checks these days, thanks to the rise of debit cards, digital payments, and other financial services, check cashing scams are still a real threat. Just because you may not write checks often doesn’t mean scammers have stopped trying to take advantage of them. In fact, many people are caught off guard simply because they think check fraud is a thing of the past.
Recent data shows that fraud targeting deposit accounts resulted in billions of dollars in losses. Even in a single year, millions were lost due to check-related scams involving both savings and checking accounts. This proves that staying alert and knowing how to spot red flags is more important than ever.
Protecting your money starts with understanding how these scams work and being cautious anytime you handle a check, whether you’re depositing one or cashing it.
Compliance Notice: Please note that all check cashing transactions over $3,000 may require additional documentation and are subject to reporting through a Currency Transaction Report (CTR) in compliance with the Bank Secrecy Act (BSA). Attempting to divide transactions to avoid these thresholds, known as “structuring”, is illegal under federal law.
How Do Check Cashing Scams Work?
Check cashing scams come in many forms, but they all follow a similar setup. A scammer sends you a check and asks you to deposit it into your account. After the deposit, you’re told to send a portion of that money to someone else, usually through a wire transfer or another fast method.
Even though banks and financial institutions are quicker at processing checks these days, it can still take several days before a fake check is detected. During that time, the money from the fake check may appear in your account, making it seem like the deposit was successful.
But once the bank realizes the check is fraudulent, that money is removed from your account. If you’ve already sent part of it to someone else, you may be held responsible for any losses resulting from the fraudulent transaction.
What Is a Check Cashing Scam and Why Should You Be Concerned?
Check cashing scams are deceptive tactics used by fraudsters to trick individuals into losing money through fake checks. These scams typically start with someone, often posing as an employer, buyer, or lottery representative, sending you a check and asking you to deposit it into your personal bank account.
Once the check is deposited, you’re instructed to send a portion of the funds elsewhere, often through a money transfer, gift cards, or another quick-payment method. Everything may seem legitimate at first, especially since the funds often appear in your account quickly. But the reality is far more dangerous.
Why Fake Checks Seem Real, Until It’s Too Late
Even though modern banks process checks faster than ever, verifying the legitimacy of a check can still take several days. In the meantime, your bank may temporarily credit your account with the amount from the deposit, giving the false impression that the funds are real.
But here’s the problem:
- Fake checks can take days, or even weeks, to bounce.
- Once the bank detects the fraud, the deposited funds are reversed.
- You may be held liable for any money used or transferred based on those funds.
This delay is exactly what scammers rely on. They want you to act fast, move the money, and fall into the trap before the check is exposed as a fake.
How to Protect Yourself from Check Cashing Scams
The best way to avoid becoming a victim is by knowing the warning signs and taking preventive action. Here’s what you should do:
- Never send money to someone you don’t know, especially if it’s based on a check you just received.
- Be skeptical of checks that come with instructions to wire or transfer a portion of the funds.
- Verify any check with your bank before using the funds, even if it looks real.
- Trust your instincts, if something feels off or too good to be true, it probably is.
Legitimate checks don’t require you to send money back. If you’re asked to do that, it’s a red flag, and most likely a scam.
Stay Safe with Trusted Check Cashing Services at Order Express
When it comes to handling checks, safety and trust matter. Instead of taking risks with unknown individuals or questionable offers, visit Order Express for secure and professional check cashing services.
At all our retail locations, and through our affiliate, JP Financial Services, Order Express offers reliable check-cashing solutions, including:
- Payroll checks
- Government-issued checks
- Unemployment checks
- And more, based on eligibility
Our trained service experts are here to help you cash your checks with confidence. You’ll receive personal, in-store assistance, and we’ll make sure the process is simple, secure, and compliant.
Note: At Order Express, we comply with all applicable anti-fraud, anti-money laundering (AML), and customer identification procedures to help protect your transactions.
Regulatory Statement: Suspicious or irregular transactions may be reported to the U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN) through a Suspicious Activity Report (SAR). Additionally, Order Express retains all transaction records for a minimum of five (5) years, in accordance with federal recordkeeping requirements.
Contact us today or stop by your nearest Order Express store to explore all your check-cashing options.
Common Check Cashing Scams
Scammers are always changing their strategies, but most check cashing scams follow a few familiar patterns. These scams often involve misleading financial transactions designed to trick you into sending money. Being able to recognize these common scams is the first step to protecting yourself. Here are a few examples you should watch out for:
Work-from-Home Job Scams
Be careful when offered a work-from-home job that involves processing payments or handling packages, this is a common scam with serious consequences. In one version, you’re asked to deposit checks into your personal bank account and wire part of the money to someone else. You’re told this is part of your job duties, but the truth is the checks are fake, and you may be financially liable for the full amount.
In another version of the scam, you receive goods along with a check, supposedly from a customer. You’re instructed to reship the items and wire part of the money back to your “employer.” Once again, the check eventually bounces, and you’re left without the goods or the money, plus potential legal issues.
No legitimate job will ask you to move money or reship items using your own bank account. If a job sounds too easy or too good to be true, take a step back and investigate before taking action.
Overpayment Scams
If you’re selling items online and a buyer offers to pay by check, especially if the amount is more than your asking price, be cautious. This is a classic overpayment scam designed to steal your money and your merchandise.
Here’s how it works: the scammer sends a check that looks legitimate but is written for more than the agreed-upon price. They’ll then ask you to refund the extra money through PayPal, wire transfer, or another quick payment method. After that, they’ll want you to ship the item right away.
The problem? That check will eventually bounce, and your bank will hold you responsible for the full amount. You’ll be out both your item and the money you “refunded.”
Always insist on secure, verified payment methods and never send extra funds back to a buyer. If someone overpays and pressures you to act quickly, that’s a red flag, walk away from the deal.
Watch Out for Mystery Shopper Scams
If you’re offered a mystery shopper job that sends you money upfront, be cautious, this is a common scam. The fraudster will mail you a check or deposit funds into your account, asking you to use part of it to make purchases and return the items. After that, you’re told to send back a portion of the money and keep the rest as your “pay.”
Here’s the catch: the check or payment you received is fake. Once the bank realizes it, you’re held accountable for the full amount, often hundreds or even thousands of dollars. Real opportunities don’t require you to send money back to anyone.
Always insist on secure, verified payment methods and never send extra funds back to a buyer. If someone overpays and pressures you to act quickly, that’s a red flag, walk away from the deal.
Sweepstakes & Lottery Scams
Getting a message saying you’ve won a lottery or sweepstakes, especially from another country, might seem exciting, but it’s often a scam. These messages usually claim that you’ve won a large sum of money, but before you can collect your “winnings,” you need to send a personal check to cover taxes or processing fees.
In doing so, you not only lose money but also risk exposing your personal financial information to scammers. In another version, they send you a check and tell you to wire back a specific amount. That check will eventually bounce.
Legitimate lotteries never ask winners to pay fees upfront. If you didn’t enter, you didn’t win. Never share your personal or financial information in response to unexpected prize notifications, especially those that demand payment.
Conclusion
Check cashing scams may take many forms, but the outcome is always the same: lost money and unnecessary stress. While scammers rely on fast action and false urgency, your best defense is staying informed, slowing down, and verifying everything.
Whether it’s a job offer, an overpayment, or a surprise prize, never deposit a check you weren’t expecting and never send money to strangers. These scams can be convincing, but the moment you’re asked to wire funds or “return” money, treat it as a major red flag. By staying cautious and trusting your instincts, you can protect your finances, and your peace of mind. Always take the time to double-check before you deposit or send. It’s better to be safe than sorry.
FAQs
What is a check cashing scam?
It’s a scam where you’re tricked into depositing a fake check and sending part of the money elsewhere.
How do I know if a check is fake?
Fake checks often come with urgent instructions to wire money or return part of the funds quickly.
Can banks reverse fake check deposits?
Yes. Once identified as fake, the bank removes the funds and holds you responsible.
Should I deposit checks from people I don’t know?
No. Always verify checks from unfamiliar sources before depositing or using the money.
What should I do if I suspect a scam?
Stop all communication, contact your bank, and report it to local authorities or consumer protection agencies.
