What happens if you unknowingly deposit a fake check?

What is a fake check?

A fake check is a fraudulent or counterfeit check that appears to be from a legitimate bank but is actually worthless. Scammers often replicate or alter authentic checks to make them look legitimate. They use these fake checks to trick people into cashing or depositing them, hoping the victim will spend or send money before the bank identifies the fraud.

The 2024 AFP® Payments Fraud and Control Survey Report revealed that checks remain the most vulnerable payment method to fraud, which makes them prime targets for scammers. So how do these scammers take advantage of this vulnerability? Let’s explore the common methods they use to create counterfeit checks.

Methods scammers use to create fake checks

Scammers are getting more creative in how they forge checks, which now come in both physical and digital forms. The most common methods they use to create counterfeit checks include:

• Creating a fake check from scratch. Scammers may use high-quality check paper, printers, or specialized software to design checks that look real. They may replicate the layout, fonts, and logos of legitimate checks and add security features like watermarks to make the check look more real.
• Modifying a legitimate check. Scammers may steal or find a real check and alter details like the payee, amount, or date. They can modify either a physical or digital check while leaving the bank account and routing numbers unchanged. This makes the check appear authentic at first glance, fooling both the recipient and the bank employee into thinking it’s legitimate.
• Check washing. In this method, scammers use chemicals like acetone or bleach to remove the ink from a legitimate check, allowing them to change details such as the payee or amount. They then use advanced software and high-quality printers to overlay new information. The process can be meticulous — scammers might carefully match the ink, fonts, and handwriting to make the changes undetectable.
• Using stolen check stock. This method involves criminals stealing blank checks and using them to create fraudulent checks with real account details obtained through identity theft, scams, or hacking. Threat actors may break into offices or mail rooms to steal checks or purchase them on the dark web.

According to the H1 2024 Check Fraud Report, the rise in check fraud is fueled by a growing cybercriminal network that uses messaging apps like Telegram to connect buyers and sellers. Stolen checks often appear on Telegram within days of being stolen. Once one check is posted, it quickly spreads to other sources. This is a common way scammers obtain stolen checks they later use to scam people.

How to identify fake checks

Several telltale signs can help you spot a fake check. Whether it’s a personal check or a cashier’s check, always take time to examine it.

1. 1.Verify the routing and account numbers. Fraudsters often use fake numbers that don’t match legitimate financial institutions. Make sure they’re valid and formatted correctly.
2. 2.Examine the paper. Authentic checks feel slightly textured, while fake ones may feel flimsy or too smooth. A real check will also have a perforated edge — an indicator that it has been torn from a checkbook.
3. 3.Check for security features. Authentic checks include microprinting, watermarks, or color-shifting ink — features that are difficult to replicate. Fake checks may lack these features or have low-quality imitations.
4. 4.Verify the issuing bank. Ensure that the check comes from a legitimate bank and that its logo looks authentic and matches the one on the official website. A blurry or poorly printed logo should ring an alarm bell.
5. 5.Look for red flags in the amount. Be cautious of unusually large amounts, rounded numbers, or numbers that don’t add up. Fraudsters often try to trick people with checks that have mismatched amounts.
6. 6.Look for typos. A real check will be error free. Typos, especially in the payee's name or the amount written out in words, are major red flags.
7. 7.Be wary of pressure tactics. If someone rushes you to deposit the check or acts too pushy, question whether the check is legit. Scammers often create a sense of urgency to stop you from properly inspecting the check. Their payday is on the line — but so is your money.

Did you know that perfectly rounded numbers can be a sign of a fake pay stub? Recognizing the signs of fake check scams can also assist bank employees in spotting fake pay stubs, which allows them to reject bogus loan applications or tax returns.

Consequences of depositing a fake check

Depositing a fake check can lead to serious financial and legal consequences. Always verify the authenticity of any check before depositing it.

How your bank handles check fraud depends on its policies, which are usually outlined in the bank deposit account agreement. Be sure to review it so you know what to expect and how to protect yourself if you deposit a fraudulent check.

How your bank handles check fraud depends on its policies, which are usually outlined in the bank deposit account agreement. Be sure to review it so you know what to expect and how to protect yourself if you deposit a fraudulent check.

Financial risks

Below are some of the potential costs and financial risks you might face after depositing a fake check.

• You’ll have to cover the cost of the check. If the bank finds the check to be fake, it’ll reverse the deposit, leaving you responsible for any money you withdrew or transferred.
• You’ll likely lose any money you sent to the scammer. If you’ve already sent funds to the scammer, it’s unlikely you’ll get them back once the check has bounced.

Do banks refund scammed money? In the case of fake check scams, it’s unlikely they’ll give you your money back once the check has cleared and you've spent the funds or sent them to scammers. However, if the issue is caught early, the bank may be able to reverse the transaction.

• You might have to pay bank fees. If the check bounces, the bank may charge you fees. If you spend the money before the check is flagged, your account could go into overdraft. This means you’d have to pay overdraft fees.
• Your bank could freeze or close your account. Depositing a fake check rings alarm bells for the bank, and it may freeze or close your account to avoid further risk or financial loss.
• You might face difficulty opening a new account or getting a loan in the future. Depositing a fake check can label you as a risk, making it harder to open new bank accounts or get loans in the future.

Legal trouble

Below are some of the potential legal troubles you could encounter after depositing a fake check.

• You could be sued in civil court. If you knowingly deposit a fake check, you may be held liable for any damages, including the bank’s losses or harm to the check issuer.
• Your credit score could drop. Check fraud can hurt your credit score, especially if it leads to overdrafts or missed payments since payment history makes up a large part of your score.
• You could face criminal charges. You could face fraud or theft charges, even if you didn’t know the check was fake. These charges may result in fines or jail time.

Can you go to jail for depositing a fake check?

Yes, you can go to jail for depositing a fake check. The penalties depend on whether you knew the check was fake and the laws in your state. If you knowingly deposit a fake or altered check, you're committing check fraud, which is a serious crime. Punishments vary based on the check's amount and state laws.

For example, in Florida, passing off a fake check is a third-degree felony, punishable by up to five years in prison. Writing a fake check is usually a first-degree misdemeanor, with a potential sentence of up to one year in jail. However, if the check is for $150 or more and the payee receives something of value, the charge can be escalated to a third-degree felony.

If you accidentally deposit a fake or altered check and fall victim to a scam, you generally won’t face criminal charges. However, proving you didn’t know the check was fake can be challenging.

What to do if you've accidentally deposited a fake check

What happens if you cash a fake check without knowing it? What should you do next? If you realize you’ve accidentally deposited a bogus check, act fast to minimize any potential fallout.

Contact your bank immediately

Let your bank know right away. Bank employees can flag the transaction and help you avoid further issues. If you have already withdrawn or spent the funds, ask if you can set up a repayment plan to avoid additional fees.

Stop the payment

If you catch the fraud before the check clears, you may be able to prevent it from being cashed. If the fraudulent check has already been processed, ask your bank if it can reverse the transaction.

Contact the US Postal Inspection Service (US only)

If you suspect you've received a fake check through the mail, contact the US Postal Inspection Service (USPIS). USPIS investigates mail-related crimes, including check fraud, and can assist with cases involving stolen checks, counterfeit checks, or fraudulent schemes run through the mail.

You can file a complaint with USPIS using the online complaint form on its official website. This service can help investigate the fraud, track the origin of the fake check, and take appropriate legal action if needed.

Report the fraud to authorities

Report check fraud to your local police department and file complaints with relevant agencies in your country. In the US, this could include the Federal Trade Commission (FTC), your state’s attorney general, or the FBI's Internet Crime Complaint Center (IC3). 

For those outside the US, you should contact your national consumer protection agency, local law enforcement, or other relevant authorities. By reporting check fraud, you help authorities track fraudulent activities and protect others from fake check scams.

Notify creditors and negotiate repayment

If the fake check was part of a payment to a creditor, let them know what happened. You may be able to negotiate new repayment terms to avoid late payment fees, damage to your credit score, or other financial penalties.

In some cases, creditors may be understanding and willing to work with you, especially if you have a good payment history with them. It's better to proactively address the issue rather than risk missed payments or penalties.

Monitor your accounts and credit

Keep a close eye on your bank accounts and credit reports for unusual activity. Regularly check your transactions for signs of fraudulent charges or withdrawals. Additionally, monitor your credit reports for any new accounts opened in your name or any changes that you didn’t authorize. Consider using identity theft protection services, such as NordProtect, to alert you about suspicious credit activity.

Act fast if you used other payment methods

If you paid a scammer via money orders or wire transfers, contact the company or service provider you used for the transaction right away to report the problem. Note that once the recipient has accessed the funds, reversing the money transfer is unlikely.

How to protect yourself from depositing fake checks in the future

Whether you're depositing a check via your bank or using mobile deposit, it's important to take measures to protect yourself. By staying vigilant and following these tips, you can reduce the risk of falling victim to check fraud and the stress that comes with it.

• Inspect checks carefully. Always examine checks for signs of authenticity, such as watermarks, proper formatting, and consistent fonts. If something looks off, double-check with the issuer.
• Never send money or purchase gift cards using check funds. If someone asks you to send money back from a check or use the funds to buy gift cards, crypto, or wire transfer money, it's a fake check scam. Legitimate transactions don’t work this way.
• Don’t accept checks for amounts larger than expected. Be wary if someone offers you a check for more than the agreed amount and asks you to return the difference. This is a classic tactic scammers use.
• Save all documentation. Keep any paperwork, receipts, or correspondence that came with the check, especially for cashier’s checks. These documents can be crucial for tracking down the scammer, reporting the fraud, and proving your case to the bank or authorities.
• Avoid accepting checks from strangers. If you don’t know the person or business issuing the check, proceed with caution. Scammers often use fake or empty accounts or checks with unfamiliar payee names to trick you into accepting fraudulent payments.
• Use mobile deposit with caution. Mobile deposit allows you to submit checks quickly, but this speed works in favor of scammers. Because the process is so fast, scammers may access the funds before the bank realizes that the check is bogus.
• Report suspicious activity to your bank. If you notice anything unusual about a check, report it to your bank right away. The sooner it’s aware, the sooner it can help prevent further issues and address any concerns you may have.
• Wait for the check to clear. This is the last, but most important tip — don’t spend any of the funds until the check has officially cleared. Even if the bank credits your checking account, the check could still be fraudulent, and you, as the account holder, will be liable for the amount if it bounces.

What should I do if someone deposited a fake check into my account?

If someone deposits a fraudulent check into your bank account, you might think that good fortune is finally on your side and that you've received “free” money. But don’t be fooled — if you weren’t expecting money, the check is likely fake. Act quickly to avoid the trouble that can follow.

1. 1.Contact your bank ASAP. Provide it with all the relevant details, such as the date, amount, and any information you have about the check or the person who deposited it. The sooner you notify the bank, the better.
2. 2.Don’t spend the funds. If the money from the fake check shows up in your checking account, don’t spend it. Your bank may reverse the transaction once it confirms the check is fraudulent. If you’ve already used the funds by then, you could be held liable.
3. 3.Monitor your account. During the investigation, keep a close eye on your account for suspicious activity. Set up a fraud alert for unusual transactions, and notify your bank if you notice anything out of the ordinary.
4. 4.Consider changing your passwords. If you think your account details might have been compromised, change your online banking passwords right away to protect yourself.
5. 5.File a police report (if necessary). Your bank might suggest you file a police report for check fraud, especially if the fake check is part of a bigger scam. Filing a police report can help protect you and track down the culprits.