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CoA Scam of the Month: Protect Yourself Against Cashier's Check Fraud

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Every month, the Council on Aging of Greater Nashville publishes a "Scam of the Month." The February edition gives tips on protecting yourself against cashier's check fraud:

Online auction sites are becoming a popular way for seniors to buy and sell collectibles and jewelry.  The cashier’s check fee fraud shows that some internet auction transactions are not always safe.  This fraud can be somewhat confusing, which is probably one of the reasons it is successful.

Here is an example of how it works:  You post an ad for your car on an online auction website for $3,000. A person bids the full asking price.  When payment is arranged, the buyer says he is going to pay using a $5,000 cashier’s check that someone owes him.  He offers to send you the cashier’s check and asks that you wire him back the difference. He even offers to pay you a small commission for your trouble. You agree and receive the cashier’s check, immediately deposit it and send the leftover sum to the buyer.  Ten days later your bank informs you that the cashier’s check was fraudulent and you’re responsible for the money you’ve drawn against it. You have now lost money and merchandise to the scam.

Here are tips that could have helped:

  • Use caution with online auction sites, especially if a potential buyer or seller is from another country.
  • Beware if the person asks you to send money quickly. It takes banks time to determine if a cashier’s check is counterfeit.  Don’t ship the goods until 10 days to 2 weeks after you deposit a check.
  • Check the FDIC’s Institution Directory to make sure the bank on which the check is drawn is legitimate.
  • Find out what protections the online auction site offers buyers and sellers.
  • Be especially wary if you are asked to wire some of the money back.
  • Save all transaction information.
  • Never provide your Social Security number, driver’s license, credit card number or bank account information
  • Never agree to travel alone to meet your buyer or seller.

Source: American Bankers Association Education Foundation’s Consumer Connection
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