There’s recently been an uptick in fake check scams targeting new college students. Young adults make excellent targets. In fact, according to the BBB Institute for Marketplace Trust, consumers ages 18 to 24 are three times more likely than seniors to fall prey to a scam. Also, the BBB’s ScamTracker Risk Report of 2018 found that 41.6% of students reported a loss when exposed to a scam as compared to 28.3% of non-students.
Don’t be the next victim! Here’s how you can recognize a fake check scam and take steps to keep yourself safe.
How does the scam play out?
There are several variations of the fake check scam. But, all of them ultimately end with the victim cashing an extra-large fake check and returning the difference to the scammer.
In one scenario, the scammer will send a bad check to a potential new roommate. The check allegedly secures the renter’s spot in the room. However, it will also be made out for an amount that is greater than the requested holding deposit. Then, the victim is asked to deposit the check and send the extra funds back to the “renter.” Unfortunately, the check won’t clear, and the victim never sees that money again.
In another variation, a young college student will be offered a remote position working for an alleged business. The student will receive a check to use for purchasing supplies or to cash as their paycheck. Again, the check is made out for more money than necessary, and the victim is instructed to send back the difference to the scammer. Again, the check will ultimately not clear, and the student will be out of the money they sent.
In the third variation of this scam, students will receive phone calls or messages from companies promising to lower their student loan payments. After applying for this “service,” the student will be sent an extra-large check. The rest of the scam will follow the same script described above.
How can I spot a fake check scam?
Watch out for these red flags which likely indicate a scam:
- You’re asked to cash a check that is made out for more money than necessary and then return the difference to the sender.
- The alleged roommate, employer, or loan company insists on paying you via check only.
- You cannot find any information online about your potential new roommate, employer, or loan company.
- The employer, alleged roommate, or contact from the loan company refuses to answer any of your questions about their location. They also refuse to meet face to face.
If you suspect a scam, first, cut off all contact with the scammer. Then, report it to the Federal Trade Commission and the Better Business Bureau. It’s also a good idea to warn your friends and classmates so they don’t fall prey to it.
It’s also a good idea to keep an eye on your credit. As a young student, you are a primary target for scammers. If your financial information has been compromised and a scammer is helping themselves to your credit file to open loans or lines of credit in your name, you may not learn about this fraudulent activity until extensive damage has been done. You can monitor your credit via a free service like CreditKarma.com, and by requesting your annual complimentary credit report from AnnualCreditReport.com. Review your monthly credit card statements as well and check for suspicious activity on your accounts.