Nearly one-third of U.S. adults have been approached with fake-check scams, usually involving fraudsters sending checks (for prizes, purchases or grants) and then asking that some money be wired back, according to a survey by the Consumer Federation of America.
The survey found that an estimated 1.3 million Americans have been taken in by the scams, losing an average of $3,000 to $4,000 when they wired the money, only to find out the checks were phony.
The survey of 2,000 adults found that the most prevalent scams involved fake sweepstakes or lotteries (66%), grants (36%) and work-at-home activities (35%). The scam artists relied on the false belief by many (59%, in the survey) that a check is valid when a bank allows funds from it to be withdrawn. In reality, most banks make funds available within a week, but it can take several weeks for a check to clear or be confirmed as fake. By then, the thief is gone and the bank wants its money back.
The No. 1 defense against check fraud is to never wire money to someone you don't know well. Other hints from the federation: Never pay to claim a prize, never pay to receive a grant, and never send money as part of a work-at-home job.