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ICBA Cautions Consumers: Be Wary of Fraudulent Cashier’s Checks

Washington, D.C. (March 9, 2010)—As part of the 12th annual National Consumer Protection Week (March 7-13), the Independent Community Bankers of America (ICBA) and its nearly 5,000 members are cautioning the public and businesses alike to be on the lookout for fraudulent cashier’s checks. Once considered the safest of checks to accept, cashier’s checks are now being used by con artists in a variety of scams.

“Fraudulent checks have grown in popularity due to the Internet and the increased availability of copiers and printers that produce quality-looking checks. Even though the problem continues to grow, you don’t need to be a victim,” said R. Michael Menzies, ICBA chairman and president and CEO of Easton Bank and Trust Co., Easton, Md. “Our customers can protect themselves by keeping an eye out for a few key warning signs that indicate something just isn’t right. And if you have any questions, if it sounds too good to be true, or if you’re just not sure, the person to ask is your community banker who can help you spot a scam.”

ICBA wants consumers to know these key warning signs. You should never take a cashier’s check if:

  • The check is for more than the purchase price;
  • The check is from a party other than the buyer or on behalf of someone else;
  • The check is from “friends” hard on their luck; or,
  • The check is from parties offering a quick, easy way to make extra money.

You can also take these precautions to discourage con artists:

  • Request a wire transfer rather than a cashier’s check;
  • Ask your bank to send the cashier’s check for collection, rather than directly depositing the check into an account;
  • Meet the buyer at the buyer’s bank to obtain direct payment;
  • Accept only cashier's checks drawn on a local bank or a bank with a local branch;
  • Keep a copy of the cashier’s check for quick reference.

“In addition to these precautions, your community bank can also protect you in a number of ways,” said Menzies. “Your community bank may place a longer hold on deposited cashier’s checks when there is reason to suspect fraud. This may seem like an inconvenience, but the bank is really looking out for the best interest of its customer. The customer, not the bank, bears the burden of any losses resulting from deposited checks. If the check were found to be counterfeit, the inconvenience would have been well worth the wait.”

National Consumer Protection Week is a coordinated consumer education campaign to encourage individuals across the country to know and take advantage of their rights. Go to http://consumer.gov/ncpw/ to learn more. And for more information about community banks visit www.ICBA.org.

For more information download the brochure "How to Avoid Being Victimized.” Additional resources, including ICBA’s comprehensive fraud toolkit, are available by visiting www.icba.org/goto/fraud.