SCARS Institute’s Encyclopedia of Scams™ Published Continuously for 25 Years
Check-Kiting Scheme: How Scammers Float Bad Checks and Get Away With Stealing Money From Banks And Account Holders
How Check-Kiting Works
A check-kiting scheme is a type of fraud that involves using two or more bank accounts to float bad checks. The perpetrator writes a check from one account to another, knowing that there is not enough money in the first account to cover the check. The perpetrator then deposits the check into the second account and withdraws the funds before the first check clears. The perpetrator can repeat this process multiple times, as long as the banks do not catch on.
Check-kiting schemes can be difficult to detect because the perpetrator is using real bank accounts and real checks. However, there are a few red flags that banks may look for, such as:
- A large number of deposits and withdrawals from different accounts in a short period of time
- Deposits of checks from banks that are located far away
- Deposits of checks from accounts that are known to be involved in check-kiting schemes
If a bank suspects that a customer is engaged in a check-kiting scheme, they may freeze the customer’s accounts or report the customer to the authorities.
Check-kiting is a crime in all 50 states and can be punishable by up to 10 years in prison.
Here are some tips to avoid becoming a victim of a check-kiting scheme:
- Be careful about accepting checks from people you do not know well.
- Do not deposit checks from people who are known to be involved in check-kiting schemes.
- Do not deposit checks from banks that are located far away.
- If you deposit a check and the bank tells you that it will be a few days before the check clears, do not withdraw the funds until the check has cleared.
Check-Kiting & Money Mules
Money mules are not typically engaged in check-kiting schemes. Check-kiting schemes involve writing bad checks and depositing them into multiple accounts in order to float money. Money mules, on the other hand, are typically used to receive and transfer money that has been obtained through fraudulent means, such as online scams or credit card fraud.
However, it is possible for money mules to be involved in check-kiting schemes. For example, a scammer might use a money mule to open a bank account and then deposit a bad check into that account. The scammer would then withdraw the money from the account before the bad check cleared. The money mule would be left responsible for the bad check, even if they were unaware that they were being used to commit a crime.
It is important to be aware of the risks associated with being a money mule. Money mules can be held criminally liable for the crimes they are used to commit, and they can also suffer financial losses. If you are approached by someone who asks you to open a bank account or to receive and transfer money on their behalf, be suspicious and refuse.
Remember
If you think you may have been a victim of a check-kiting scheme, you should report it to your bank and to the local police. See reporting.AgainstScams.org for more information about reporting.
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Table of Contents
- Check-Kiting Schemes
- How Scammers Play The Banking System
- Check-Kiting Scheme: How Scammers Float Bad Checks and Get Away With Stealing Money From Banks And Account Holders
- How Check-Kiting Works
- Check-Kiting & Money Mules
- Remember
- More:
- Do You Need Support?
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SCARS STAR™ Member - Scam Victim Self-Help Do-It-Yourself Recovery Books
- SCARS Printed Books For Every Scam Survivor From SCARS Publishing
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Important Information for New Scam Victims
- Please visit www.ScamVictimsSupport.org – a SCARS Website for New Scam Victims & Sextortion Victims
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A Note About Labeling!
We often use the term ‘scam victim’ in our articles, but this is a convenience to help those searching for information in search engines like Google. It is just a convenience and has no deeper meaning. If you have come through such an experience, YOU are a Survivor! It was not your fault. You are not alone! Axios!
A Question of Trust
At the SCARS Institute, we invite you to do your own research on the topics we speak about and publish, Our team investigates the subject being discussed, especially when it comes to understanding the scam victims-survivors experience. You can do Google searches but in many cases, you will have to wade through scientific papers and studies. However, remember that biases and perspectives matter and influence the outcome. Regardless, we encourage you to explore these topics as thoroughly as you can for your own awareness.
Statement About Victim Blaming
Some of our articles discuss various aspects of victims. This is both about better understanding victims (the science of victimology) and their behaviors and psychology. This helps us to educate victims/survivors about why these crimes happened and to not blame themselves, better develop recovery programs, and to help victims avoid scams in the future. At times this may sound like blaming the victim, but it does not blame scam victims, we are simply explaining the hows and whys of the experience victims have.
These articles, about the Psychology of Scams or Victim Psychology – meaning that all humans have psychological or cognitive characteristics in common that can either be exploited or work against us – help us all to understand the unique challenges victims face before, during, and after scams, fraud, or cybercrimes. These sometimes talk about some of the vulnerabilities the scammers exploit. Victims rarely have control of them or are even aware of them, until something like a scam happens and then they can learn how their mind works and how to overcome these mechanisms.
Articles like these help victims and others understand these processes and how to help prevent them from being exploited again or to help them recover more easily by understanding their post-scam behaviors. Learn more about the Psychology of Scams at www.ScamPsychology.org
Psychology Disclaimer:
All articles about psychology and the human brain on this website are for information & education only
The information provided in this article is intended for educational and self-help purposes only and should not be construed as a substitute for professional therapy or counseling.
While any self-help techniques outlined herein may be beneficial for scam victims seeking to recover from their experience and move towards recovery, it is important to consult with a qualified mental health professional before initiating any course of action. Each individual’s experience and needs are unique, and what works for one person may not be suitable for another.
Additionally, any approach may not be appropriate for individuals with certain pre-existing mental health conditions or trauma histories. It is advisable to seek guidance from a licensed therapist or counselor who can provide personalized support, guidance, and treatment tailored to your specific needs.
If you are experiencing significant distress or emotional difficulties related to a scam or other traumatic event, please consult your doctor or mental health provider for appropriate care and support.
Also read our SCARS Institute Statement about Professional Care for Scam Victims – click here to go to our ScamsNOW.com website.
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