Even a Dog Can Figure Out Check Fraud

Scammers have been known to send fake checks to babies, dead people, and now dogs, too. This case only further illustrates how easy the fake check scam is to spot and avoid.

“It was so transparent, even Walter figured it out immediately,” Mark Goldman said.

Walter is Goldman’s law partner. Not really, Goldman is a Scottsdale Attorney, Walter is his Bull Terrier, but you wouldn’t know it from the company website. Walter’s picture is all over the site, he’s listed as a partner, and he even has an honorary law degree.

“He has an email address at the law firm, he received an email from a gentleman that claimed to be in England,” Goldman said.

The man wanted to hire Walter to collect money from a deadbeat. Just to see what would happen, “Walter” agreed and asked for a retainer. Instead, he got a check in the mail for $198,000 from the so-called deadbeat. The debtor asked Walter to deposit the check, take his fee and wire the rest to the creditor to settle the debt. Goldman says lawyers are frequent targets of this ruse.

“Lawyers are targeted in particular because lawyers have an obligation to deliver the proceeds of any settlement checks to the clients,” Goldman said.

Scammers couldn’t trick Walter, but they succeed with many people thanks to a loophole in a federal banking law.

“The Expedited Funds Availability Act is the name of the law. It essentially means funds are available before the checks actually clear the bank,” Goldman said.

If “Walter” had wired the money when the funds were available, he wouldn’t know for two weeks that the check was bad, then he’d have to pay the bank back every penny. But the law partners of Goldman & Goldman foiled this scam.

“Walter handled it appropriately and according to the policy of our law firm and what any individual and business should do,” Goldman said.

No legitimate person will ever ask a stranger to pay them by money wire. So, never wire money to anyone you don’t personally know, period. And if you deposit a check from a stranger, never use any of the money until the check clears. Forget about when the funds are available, that issue doesn’t matter; only when the check clears should you spend the money.

Walter figured this scam out; so should you.

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