Check schemes are spreading across the U.S. as scamsters exploit the popularity of online auction, dating and social-networking sites to find victims.
The scams have grown so prevalent that the Postal Inspection Service has launched a TV and print campaign – its largest-ever anti-fraud drive – to alert consumers. Overseas investigators, working with U.S. postal inspectors, have arrested 77 people this year and intercepted $2.1 billion in counterfeit checks headed for the U.S. And the Federal Trade Commission sued two Canadian companies in October, accusing them of using fake checks to bilk U.S. consumers.
Even as consumers reduce their use of checks, the creation of fake checks is booming. Fraudsters are using them to pay for goods advertised online or to convince people that they’ve won sweepstakes prizes.
“Fake checks seem to have really peaked in the last couple of years,” says Steven Baker, head of the Federal Trade Commission’s Midwest region. “When (fraudsters) find something that works, the word spreads.”
If customers lose money because of check fraud, their banks won’t bail them out. But if those customers can’t repay, the banks get stuck with the losses.
No one knows how much money customers have lost from bogus checks. But last year, banks alone lost $271 million from fake checks – a 160 percent jump from three years earlier, according to the American Bankers Association.