Caution: Beware of counterfeit checks and overpayment scams

Orlando’s beleaguered KEL law firm has been scammed out of about $285,000 by a  phony client. According to news reports, the firm was contacted via email by someone (obviously a sophisticated scammer) pretending to have lost wages from a fictitious employer. The firm received a settlement check; the “client” requested that the funds be sent to his account in a Japanese bank. The law firm did so before the check cleared—and it turned out the check was counterfeit. The firm couldn’t get wire transfer reversed.

It’s easier than ever to get clients over the internet—and easier than ever to become a victim of an online fraud. One common online con is the overpayment scam.

It works like this: A prospective client—who seems normal in every other way, even down to a little price haggling—makes an offer that you’re willing to accept. He asks if you’ll accept a money order or cashier’s check as payment. You agree and then he gives you some pretext for sending the money order in an amount larger than the fee you’ve quoted. He asks you to cash it, keep your fee, and send the difference to him via wire transfer.

If you agree, the money order will likely arrive by an overnight courier service and is followed up by an e-mail reminding you to get to the bank, cash it, and send the excess funds as agreed and perhaps even nudging you to get the work done. You do what you promised—and you never hear from the client again. But then you get a notice from your bank that the money order or cashier’s check has been returned unpaid and marked counterfeit, and your account has been charged the amount of the item plus a service fee.

The numbers might look like this: You agree on a fee of $5,000. He sends you a money order for $7,000 and asks you to send him $2,000 (less the necessary fees) by wire transfer. When the money order comes back as bogus, you’re out the wire transfer fee of about $100, the bank service fee of $20 or $30, and the $1,900 you sent him. And if you did the work, you’re out the value of that, too.

If you receive a bank check, cashier’s check, money order or similar form of certified funds, don’t spend the money or ship the merchandise until you are absolutely certain the document is real. One quick and easy way is to call the issuing bank—but don’t call a number printed on the check, look up the number yourself. Remember, just because your bank accepts the deposit doesn’t mean you’re in the clear. Even if the bank doesn’t realize until weeks later that a check is bogus, your account can still be charged back.

Update 1/25/2012: The KEL Law Firm is now under investigation by the Florida Bar for internal practices that may have made it vulnerable to a scam of this nature.

Jacquelyn Lynn is a business writer and ghostwriter who creates written content in the form of books, ebooks, articles, blogs, social media copy, white papers and more. Fortunately, she’s never received a counterfeit check.