What Happens If You Unknowingly Deposit A Fake Check

What Happens If You Unknowingly Deposit A Fake Check

We’ve all had that moment of excitement when we get an unexpected check in the mail. But what if that check turns out to be fake? It’s an unfortunate situation that more people find themselves in than you might think. Keep reading to understand what can happen if you deposit a fraudulent check.

The Check Initially Clears

When you first deposit a bad check, your bank makes some or all of the funds available to you fairly quickly, before they actually collect the money from the check-writer’s bank. This is to provide good customer service. So at first, it looks like the check has cleared and the money is yours to spend (FTC).

You Spend the “Money”

Not realizing there’s an issue, you go ahead and spend the money, whether it’s to buy something you’ve been wanting or pay some bills. After all, your bank account shows the deposit went through so those must be good funds!

The Check Bounces

Weeks later, the check makes its way through the banking system only to be rejected by the check-writer’s bank because of insufficient funds. This can take weeks due to how banks process checks (MyBankTracker). At this point, your bank reverses the deposit and removes the money from your account.

You Owe the Money Back

Now your account is negative because you spent money that wasn’t actually there. Your bank will expect you to deposit funds to cover the overdraft. If you can’t cover it, they may close your account and send you to collections. You could also face legal issues like check fraud charges.

Protect Yourself

While being scammed is frustrating, you can avoid fake check troubles by taking a few smart steps:

• Be suspicious of any unexpected checks.
• Never accept checks for more than the amount owed.
• Wait until a check fully clears before spending the money.
• Know the signs of counterfeit checks.
• Work with your bank at the first sign of issues.

By understanding how fake check scams work and using caution, you can prevent the hassles that come with a fraudulent deposit. Don’t hesitate to verify a check’s legitimacy if you have any concerns. It’s better to be safe than stuck owing money to your bank!