First State Bank alerts consumers to Check Overpayment Scam

First State Bank is advising all Keys consumers, business owners and charities to be on the alert when accepting cashier's checks, especially if written for high-dollar amounts or amounts in excess of the sales price, donation or amount agreed upon.

Recently, First State Bank discovered two instances of this Check Overpayment Scam. In both situations, cashier's checks were presented as a donation or down payment for services. The presenter of the checks then asked for a partial refund of the funds given.

In both instances, the customers were advised by First State Bank against returning any funds until the cashier's checks were cleared by the issuing bank. Both cashier's checks were deemed fraudulent, but the customers were protected against loss by not refunding any money to the presenters of the checks.

"We are proud to have been able to detect this fraud and protect our customers from large potential losses," said Karen Sharp, president and chief executive officer of First State Bank. "We hope that this alert protects others in our community from falling victim to this scam."

The Federal Trade Commission (FTC) issued a consumer warning on the Check Overpayment Scam. The following are FTC tips on protecting against check overpayment scams:

• Know who you're dealing with. In any transaction, independently confirm the buyer's name, street address, and telephone number.
• Don't accept a check for more than your selling price, no matter how tempting. Ask the buyer to write the check for the correct amount. If the buyer refuses to send the correct amount, return the check. Don't send the merchandise.
• Consider an alternative method of payment. As a seller, you can suggest an escrow service or online payment service. There may be a charge for an escrow service. If the buyer insists on using a particular escrow or online payment service you've never heard of, check it out. Visit its website, and read its terms of agreement and privacy policy. Call the customer service line. If there isn't one or if you call and can't get answers about the service's reliability, don't use the service. To learn more about escrow services and online payment systems, visit www.ftc.gov/onlineshopping.
• If you accept payment by check, ask for a check drawn on a local bank, or a bank with a local branch. That way, you can make a personal visit to make sure the check is valid. If that's not possible, call the bank where it was purchased and ask if the check is valid. Get the bank's phone number from directory assistance or an Internet site that you know and trust, not from the person who gave you the check.
• If the buyer insists that you wire back funds, end the transaction immediately. Legitimate buyers don't pressure you to send money by Western Union or a similar company. In addition, you have little recourse if there's a problem with a wire transaction.
• Resist any pressure to "act now." If the buyer's offer is good now, it should be good after the check clears the issuing bank.
• Throw away any offer that asks you to pay for a prize or a gift. If it's free or a gift, you shouldn't have to pay for it. Free is free.
• Resist the urge to enter foreign lotteries. Most foreign lottery solicitations are phony. What's more, it's illegal to play a foreign lottery through the mail or the telephone.

About First State Bank

With over 50 years in the Keys, First State Bank is the oldest locally owned and operated full-service bank, serving all of Monroe County from Key West to Key Largo.

Providing leading edge banking services, First State has more branches, ATM locations, drive-thru lanes and weekly operating hours than any bank in Monroe County.