Ken Paxton
Consumer Protection

Beware of Cashier's Check Scam

Our office receives complaints almost daily about counterfeit cashier's checks. The people who call us usually have been trying to sell a big-ticket item such as a car or boat. Most often, the item was listed on line, but in some cases it was listed in the newspaper or a specialty magazine. The consumer is contacted by a buyer, who agrees to pay the asking price.

The problem arises when the buyer offers to pay with a cashier's check made out for an amount that is considerably higher than the agreed amount of the sale. Buyers offer various stories to explain why the check is so large. The buyer asks the consumer to wire back the difference. There are two warning signs here that you should never ignore: the check is for money in excess of the price, and the buyer asks you to wire the money instead of using US Mail. DON'T DO IT!

That extra amount of money is the amount of your own money that you are about to lose. The use of wire instead of mail is to protect the criminal from possible mail fraud charges, which as you know can be quite serious.

There is another disturbing twist: in many cases, the consumer has taken the precaution of asking the bank to verify that the cashier's check is good. In some cases, the cashier's check even appears to be drawn on the very bank that is being asked to cash it! That is how good these counterfeits are. Sometimes the consumer has even waited for a period of time up to two or three weeks before wiring the money. But the result is always the same: the check turns out to be bad.

We know of one victim, a young woman, who is paying off $20,000 at the rate of $200 per month to cover money wired in a scam of this nature. Another victim lost $9000 after being assured by a teller that the check was good. The bank generally will not absorb the loss if you fall for this scam. Do not take any chances. There is no reason for you to cash a check made out for an amount in excess of the purchase price. Cease all contact with anyone who approaches you with an offer like this. They are trying to rob you.

ABOUT CONSUMER ALERTS - The Office of the Attorney General accepts consumer complaints about businesses. When a pattern of complaints warrants intervention, the Attorney General can file a civil lawsuit under consumer protection statutes, sometimes with the result that a company is required to pay restitution to consumers -- see our Major Lawsuits page. However, when a consumer is swindled by a con artist, filing a complaint cannot help. Civil litigation can sometimes put a very unscrupulous business out of action, but often cannot produce restitution.

Individual con artists generally fall under the jurisdiction of a criminal prosecutor -- in Texas, this is the district or county attorney. But even when they are charged and convicted, these individuals usually have spent the money as fast as they have stolen it. A person who is the victim of fraud should report the incident to the police or sheriff. But by far the best thing is for consumers to be aware of fraud, so they are not swindled in the first place. For this reason, the Office of the Attorney General posts these Consumer Alerts about possible scams and schemes that come to our attention through citizen contacts to our office or other sources.