Cashier's checks have always had a reputation for being as good as cash, but that's not a sure thing anymore. The reputation has gotten tarnished as more and more counterfeiters opt to phony-up cashier's checks and pass them off to folks like you.
"People are getting sophisticated with PCs and scanners. We're going to be seeing a lot more of this," says Marty Ramage, fraud expert with The People's Bank & Trust Company of Tupelo, Miss.
Ramage says one of his bank's cashier's checks was counterfeited a few weeks ago.
The way it works is the counterfeiter comes into the bank, gets a legitimate cashier's check and then uses a scanner to copy it on to a computer. With the help of some printing software, the counterfeit can be doctored -- payable to anyone, for any amount.
"It's put a bind on our bank on accepting cashier's checks," Ramage says. "In the past we would have taken a cashier's check from any bank across the nation without question. All banks have been accustomed to treating cashier's checks as cash. Not anymore. Everyone has to take some safeguards."
The FDIC is receiving reports of several fake cashier's checks each month.
"Some are complete phonies -- the bank name is phony, the city is misspelled. But some are identical copies, and it's really difficult to tell they're fake," according to Gene Seitz of the FDIC's special activity section.
Seitz says very few of the counterfeit cashier's checks are being cashed at banks; they're being used to pay individuals and merchants.
Seitz advises everyone who receives a cashier's check as payment to call the issuing bank and make sure it authorized that check.
That means consumers should think twice before accepting a cashier's check no matter how real it looks. If someone tries to give you a $2,000 cashier's check for your used car, or a $30 cashier's check for something you're selling on Ebay, don't accept the payment until the issuing bank has verified it.