How to Verify a Cashiers Check

In the online world of business today, a cashier's check can be the indication that a scam is trying to happen. Although the check seems like it could be valid, accepting one from a stranger could be a financial loss about to happen. This is especially true if the individual issuing the cashier's check lives outside of North America. If you've received one as a form of payment and you're wondering if it is real and can be deposited, then here is how to verify a cashier's check.

1. Call the Issuing Bank of the Check

One of the fastest ways to determine if a cashier's check is authentic is to contact the issuing bank listed on it. An easy scam is to print out a legitimate looking cashier's check, but use false banking information on it. The check is issued for more than necessary and a refund is then requested. You send the refund and the goods purchased and then wind up losing everything. A quick phone call could save the hassle. Don't use the phone number that's on the check to verify the bank. If the bank is fake, then the phone number is probably fake as well. It might even go straight to the scammer, who would obviously verify the information for you to fool you. Look up the bank yourself, find a customer service number, and then call that. Tell the issuing bank what you have, the details of the check, and if they think it is authentic.

2. Deposit the Check Instead of Cashing It

If you've called the issuing bank and determined that it is a real institution, then the next step is to deposit the check. Make sure that you have a mandatory 14 business day waiting period on all cashier's checks that are received before issuing goods to people. This amount of time will help your bank determine if the check is authentic and that funds should be released. If it is a counterfeit and the amount is in your account, the bank will just remove the amount of the check. If you've cashed it, then a recall order for that cash will be issued. Don't be pressured to advance a refund for an overpayment. Always wait the 14 business days and then issue the refund. No exceptions. After all – you likely gave them the correct amount and they issued the wrong amount in excess.

3. Trust Your Gut

If something smells wrong about a deal, then let it go. It's better to lose one iffy sale than it is to lose a ton of cash and your goods as well. Maybe your reputation might take a small hit if the cashier's check winds up being authentic, but that's a small cost too pay in order to stay safe.

4. Consider Using a Third Party

Instead of accepting cashier's checks, consider making it mandatory to use a third party payment processing center instead. Escrow services or digital money accounts will hold the money that is paid for goods or services until it clears. Of course there are scams in this area as well of which one must be leery, but in the end when there are more protections in place, a person's finances will generally be more protected.

5. Look at Your Insurance Policy Before Cashing Your Cashier's Check

Many insurance policies, including homeowner's insurance, will protect consumers against an instance of a fake check or counterfeit cash. Most policies have a standard limit that will cover up to $1,000 in losses, but not every policy offers this as a benefit. It is usually a service that doesn't have a deductible. If the check is fake, then get official copies of this fact from your bank or credit union so a claim can be filed on the amount.

6. Know the Difference Between Funds Being Available and the Check Clearing

This is where most people get into trouble. Federal law requires a bank to make funds available from a deposit within a certain amount of time even if the check has yet to clear. If there is a hold on the funds that is released, many assume this means the cashier's check has cleared. That is not necessarily true. It may take several weeks for a check to be determined a valid deposit. Knowing how to verify a cashier's check can save you a lot of time, headaches, and cash as time goes by. Use these tips to make sure each check you receive is the real deal instead of another common scam.

Posted on Mar 16, 2015


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