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Remote deposit cheque fraud

How it works and how to avoid being scammed

June 2023 Time to read 4 min read

Scammers never rest, and they are getting more sophisticated all the time. One of the scams going around is cheque fraud, especially related to remote cheque deposit. Here are some tips to help keep you and your bank account safe.

What is remote deposit related cheque fraud?

The remote deposit version of cheque fraud starts with a scammer asking you to use remote deposit to deposit an emailed image of a cheque for them. Once the funds are in your account, the deal is that you send them some of the funds and keep the rest. If someone approaches you with this offer, remember the old adage: if it seems too good to be true, it probably is.

If the cheque is later determined to be counterfeit, you are responsible for returning all of the funds to your financial institution. This applies even if you have been the unwitting victim of fraud and have already sent part or all of the funds on to the fraudster. To avoid being caught by this scam, it’s important to understand what is acceptable for remote deposit.

How to spot and avoid the fraud

The first tip is to be suspicious of anyone approaching you with this kind of offer to begin with. If someone appears to be trying to use you to avoid a paper or electronic trail leading back to themselves, it’s a red flag for a scam.

The second tip to keep in mind is that taking a photo of an image of a cheque you have received is not acceptable for remote deposit. A valid cheque for remote deposit is a physical cheque that has not been altered in any way. To avoid counterfeit cheques, you should know and trust the person, company or department giving you the cheque.

To help you spot this kind of fraud, here are a few common examples:

Employment Scam - These scammers target job seekers. The scammer tells you that, before you get the job, you must first pay a fee or provide your banking or other personal information, or they send you an advance payment by cheque that they want you to cash.

Online Purchase Scam - These scammers target people that buy/sell online. The scammer tells you that they would like to sell you something or buy something from you, for example a car, and sends you a cheque to "prepay" for a transport company to move the car. They tell you that they sent too much and can you please send some of the money back.

Financial assistance scam - These scammers tell you that they have been locked out of their bank account and need your help to get access to their funds. They send a cheque for remote deposit and then tell you that you can keep a portion of the cheque if you send them some of the money.

If you suspect someone of trying to catch you with remote cheque fraud, cease all contact with the fraudster and don’t send them any funds. Contact Coastal Community as soon as possible to let us know about the situation. One of our experts will place a hold on the cheque in order to verify it with the financial institution it is drawn on.

If the cheque is legitimate, the hold will be removed.  If the cheque is counterfeit, it will be taken out of your account and returned within a couple of days.

The bottom line is that if something seems out of the ordinary, verify it. It may take an additional few minutes, but it could save you a large loss.