Scam Busters: A New Stimulus Check Fraud


You may get a stimulus check for as much as $7,000 in the mail soon, but it won’t be from President Obama, and it could probably get you in some trouble.

The South Carolina Department of Consumer Affairs recently uncovered a scam in which potential victims receive an official-looking fake check in the mail along with the promise of thousands of dollars in the form of a “secondary stimulus check” if they register by calling the provided toll-free number.

“These checks look so official,” says Alice Brooks, director of public information for the department. “They come in people’s mailboxes and they go right out and deposit them, not realizing that they’re fake. “

Congress may only be just approving President Obama’s $819 billion stimulus package, but that hasn’t stopped South Carolina’s banks from cashing these fake checks already.

10 Day Wait to Verify Government Checks
Unfortunately, banks throughout South Carolina have no way of knowing whether or not these checks are real. Many have instituted a 10-day hold on all government checks in response to a similar scam perpetrated last year. These holds protect consumers from overdrafts, but fear of a scam hasn’t stopped some cash-strapped South Carolinans from trying to cash these bogus checks.

“I spent several minutes telling a woman that she had to wait 10 days to make sure that the government check she’d received was for real,” says Brooks. “After a heated discussion, she said ‘So, what you’re telling me is that I should just cash the check at another bank?’”

An Offer That Will Cost You
Unlike the previous scam, in which victims were asked to provide their bank account numbers in order to receive their stimulus checks, this one encourages victims to call a toll-free number. The recorded message on the other end of the line explains how callers can make money selling foreclosed homes to the U.S. government. The catch is that they have to spring for the cash to buy an informational packet.

“People hear news about foreclosures and the stimulus all the time,” says Brooks. “So they call the toll-free number and give their bank and social security information to these con artists. They never think to themselves, ‘Why would the government want to buy foreclosed homes in the first place?’”

How to Verify a Check
Generally, there is no way to tell whether or not a check is real on sight alone. Even bankers have a hard time identifying bogus checks.

“There is so much printing technology out there,” says Margo Moshberg, of the American Bankers Association in Washington, D.C. “It’s impossible for banks to tell the difference.”

A check may look as though it’s good to go, but before you run out and deposit it, you should keep a few things in mind:

Where is the check from? Your mother probably told you that you should never take anything from strangers when you were a kid, but even adults should be wary. If you don’t recognize the name listed on your check, there is a chance that you may have been targeted by a con artist. If you think that you’ve received a check from the government, contact the U.S. Department of the Treasury to find out if it’s real.

What is the money for? There’s no such thing as a free lunch, so don’t expect that a mysterious check that comes in the mail will be free of catches or additional solicitations. If anyone asks you for additional information or expects you to purchase something, you may want to shred the check and move on.

Is there a timetable? Checks issued by businesses or government entities tend to be good for as many as 180 days after issue. If you see any message that says, “Act now in order to receive your money,” that could be a red flag.

What information NOT to give on the phone
Con artists tend to rely on the Internet and the U.S. Postal Service, but, according to data complied by the Federal Trade Commission, more than 31,000 scams were initiated by phone in 2007.

You never know who you’re going to get a call from, however you should know that there are some things that you never tell anyone by phone. Here are a few:

  • Social Security numbers. Your social security number allows criminals to apply for credit cards in using your name. Keeping that information under your hat will help keep your identity (and your credit score) safe.
  • Bank account numbers. When you give your bank account number to a stranger, you risk being wiped out by thieves. Anyone who asks for it may be up to no good.
  • Maiden names or birthdates. Con artists can use even the most innocuous information to bilk people out of their money. You may use your mother’s maiden name or a birthdate to confirm your identity, but criminals can do the same thing.

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