Sep. 28—Fake check scams affected more than 39,000 consumers or businesses in 2021, according to the Federal Trade Commission, and recently the nationwide issue hit locally as scammers targeted a Mentor-based home repair business.
However, the owner's instincts and quick actions prevented any losses.
According to a news release from the Better Business Bureau, Norm Dillen, owner of Choice Home Repair, received a text in early September from the scammer who introduced himself as a man from Colorado named Howard Kirk. Kirk claimed he found Choice Home Repair through BBB's website.
Kirk then stated he desired to paint the interior walls of his newly purchased home on Engle Road in Brook Park.
The release stated after corresponding through further text messages, phone calls and emails, Kirk sent Choice Home Repair a cashier's check. Although the painting project was only estimated at $4,783, the cashier's check was written for $9,891.50 and came with instructions to put half down on the project and then pay the previous homeowner $7,500 when Choice Home Repair obtained entry keys.
The owner of Choice Home Repair immediately became suspicious and contacted BBB and local police. BBB was able to verify through the Cuyahoga County Auditor's office that the reported owner of the newly purchased home did not match the scammer's name.
According to the Federal Trade Commission, in 2021 they received 39,113 reports of fake checks or foreign money offers with losses of over $78.1 million overall. This is an increase from reported losses of $47.4 million from the same scams in 2020.
Fake check scams typically target consumers, but businesses can also become victims, according to the release.
To prevent becoming a victim of check fraud, the BBB warns consumers and businesses alike to be wary of situations where a third party is trying to obtain immediate payment from cashed funds or is overpaying by check and requiring quick reimbursement.
By law, banks must make funds available for deposited checks in a reasonable amount of time, but the bank will also recover money from the account holder when a check is discovered to be counterfeit. In short, a check casher will lose any money they spent, or sent back to the scammer, once a check bounces.
The BBB offered the following information for consumers and business owners to be wary of when guarding against fake check scams:
—Checks and postal orders can be forged — Be skeptical of checks and postal orders because they can be easily forged. For cashier's checks, consumers can google bank routing numbers at the bottom of the check to see if it matches the bank it is supposedly from.
Real checks also use special fade and smear-resistant ink. Check for any misspellings on the check itself. Review details for red flags such as oddball third-party company names listed as the check drawer.
—Available funds may not be cleared — Just because a bank deposited funds, doesn't mean a check cleared. Checks are usually cleared in two business days but the process can take up to a week or more to complete. When in doubt, wait for funds to clear before withdrawing for personal use.
—Be wary of online job postings and mystery shopping — Some activities put consumers at a higher risk of encountering fake checks. Many online work-from-home job scams, particularly mystery shopping gigs, utilize fake checks.
In these scenarios, scammers will mail out fake checks as payment or for reimbursement of work-related costs. Sometimes the scammer will claim they accidentally overpaid, other times they may ask a victim to purchase gift cards as part of their job duties and then mail the gift cards back to the mystery shopping company.
Consumers can report suspected scams to BBB.org/ScamTracker. These reports help others avoid falling victim to scams. Consumers can visit the Scam Tracker website to view the latest reported scams in their neighborhood or across North America.