"I figured if whatever check I did have wasn't good, it wouldn't go through at the bank," Smith said. "I had constant communication with this other person, so I felt there wasn't anything wrong."
But when he called the return phone number on the FedEx package containing the checks, the person who answered had no knowledge of Smith's supposed employer. He went to the bank and had to wait more than a week to confirm they were counterfeits. If he didn't repay the bank the $6,000, he would be reported to ChexSystems and wouldn't be able to open a U.S. bank account for at least five years.
"Luckily, I opened another one before it got reported," he said. Now the $6,000 has been turned over to a collection agency, and "I pay about $250 a month for two years to pay it off."
When you become a criminal
Cashing a fake check becomes a criminal act when you are aware of the counterfeit. Typically, banks won't press charges unless it's clear you knew about the scam, Feddis said.
But just because you know you're innocent doesn't mean that law enforcement will see it the same way.
Earl Walls, a Huntington, W.Va., retiree, had never been in trouble with the law before he deposited phony checks and wired $3,000 to scam artists. After his arrest, the bank froze his account; he couldn't even pay a retainer to a lawyer. According to county rules, his income from Social Security was high enough that he didn't qualify for a public defender, but the bank wouldn't let him withdraw from his account.
"I had no money," said Walls, who had been a supervisor in a corrugated-box factory. "I had to get out and borrow money from friends and relations to make a house payment."
Fortunately, his neighbor contacted the West Virginia Attorney General's Office, which recognized that Walls was a victim rather than a criminal, said Derek Walker, the chief investigator for the attorney general.
"He received instructions from this 'employer,' and he followed the instructions to the letter," Walker said. "His story checked out."
After state officials talked to the county prosecutors, Walls received a pro bono public defender, and all charges were dropped. But he says that he still feels anxious when he sees a police car or even a FedEx truck -- like the one that brought the counterfeit checks to his door -- in his neighborhood.
How to spot the scam
The best way to avoid being scammed is never to wire money to someone you haven't known for a long time, Walker said. Even then, confirm that the person you're sending money to actually is the relative or friend you want to help.
One West Virginia resident received an urgent call asking "Grandma" for help. She blurted out her grandson's name, and the caller said, yes, that was him. But after she wired the money, it turned out that her grandson was fine. She'd just been scammed, Walker said.
Other tips include:
- Never pay money in order to claim a prize. No legitimate lottery or sweepstakes will ask you to send money in advance before receiving your winnings. If you were actually a winner, you'd pay any taxes directly to the government after getting your prize.
- Never pay for grants from foundations or the government. Genuine grants -- which mostly go to organizations -- don't charge for money or have lengthy application processes.
- Never send money to anyone who asks you to cash a check or money order, whether in connection with the sale of an item, a work-from-home job or an Internet romance.
- Never wire money to someone unless you have met him or her in person and have known each other for a long time.
To learn more about scams, contact the Consumer Federation of America, the Federal Trade Commission, Fraud.org and FakeChecks.org of the National Consumers League, Scam Victims United and Fraud Aid.
