The check was in the mail, but is it real? How to tell: Plain Dealing (2024)

Q

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I received a check from American Express for $8.23, from a foreign currency fee litigation settlement fund, but I have never had an AmEx card. I'm worried about cashing it. Is this a scam?

-- Mario DeLillo, Highland Heights

A

. That whopping $8 check is real.

You're likely getting the check because you used a MasterCard, Visa or Diner's Club card while traveling overseas years ago. The refund is the result of one of two related class-action suits that accused AmEx of conspiring with the credit card companies to fix prices on transactions travelers made while they were abroad. In some cases, consumers were affected by the alleged fee-fixing when they made a purchase from a foreign merchant. The companies denied wrongdoing but settled.

Chances are, at some point over the last few years, you received a notice about the suit that gave you the chance to opt out. If you’re like most people, you threw the letter out because it was really long and didn’t have a check inside. But the point is, this check didn’t really arrive without warning.

So that fat $8 check is all yours. Cash it fast. It’s only good 90 days.

It’s good to be wary of unexpected checks, because there are so many counterfeit check scams that start with a victim receiving an unexpected check. But don't let fear dissuade you from cashing a legitimate check.

How do you tell the difference?

Fake checks tend to be big – often more than a thousand dollars, sometimes tens of thousands of dollars. The only way a scammer can make a counterfeit check scam work is to pretend to send you enough money that you’ll be willing to return some of the dough after you deposit the bogus check.

If you deposit a counterfeit check, the money will show up in your account because banks are required to give you access to deposited funds in a limited time. But when the bank discovers the check is fake, it takes its money back. The scammer tries to trick you into sending money to him or to an accomplice in that short window during which you’re thinking the check was good because the funds are in your account.

Often fake checks are disguised as phony government grants or as winnings from a lottery or sweepstakes. They frequently are offered as payment for some kind of work-from-home job. Mystery shopping or payment processing job offers are typical counterfeit check scams.

Fake checks also target people trying to sell goods online. Phony buyers send you a check for way more than the purchase price and then ask you to send the overage back. Or they create a sad story about why they can't go through with the sale and ask you to send back the bulk of the money. (In a really clever touch, scammers usually tell you to keep some of the money for your trouble.)

In contrast, real settlement refund checks tend to be smallish, particularly for those consumers who weren’t directly involved in a class-action lawsuit, because the settlement is often spread over thousands (in this case, millions) of consumers. The point of a class-action suit is to force a company to pay a large enough total penalty that it rethinks some practice that harmed consumers.

A real check has no strings attached. No one sending you a real check will ask you to deposit the check and then call for further instructions. No legitimate check issuers will ask you to deposit the check and then wire money somewhere else.

Class-action settlement checks are packaged with letters that explain both the issue in the case and the settlement agreement, identify the court and the lawyer representing consumers and give you a web site with even more information about the case.

People have mixed feelings about class-action suits, and whether you cash class-action refund checks is up to you. Generally, if you get one, you probably paid a lot more in wrongful fees than you’re getting back in the settlement. If you don’t cash the check, the money may go back to the company. Less often, the parties agree in advance to donate unclaimed settlement money to a legal aid society or a charitable organization.

Genuine checks that tend to confound consumers most are refund checks from private class-action suits like this one, refund checks that result from enforcement actions by agencies like the Federal Trade Commission and, oddly, tax refund checks from the state of Ohio, because the issuer is listed on the check as “Taxation Refund Research” rather than the name of a department you'd know.

Find a list of FTC cases that resulted in checks to consumers here or call 1-877-382-4357.

Compare a state tax refund check to the real one here or call 1-800-282-1780.

Read more about counterfeit check scams at cleveland.com/scamfinder.

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