MSNBC
Fake Check
Scams Spread
1.3
million Americans have fallen for this trick, according to
CFA report
May
28, 2009 --To
a con artist, cash is king. International scammers have developed
a deviously clever way to trick people into sending them cash.
The crooks mail out counterfeit checks or money orders and
come up with a creative story to get their victims to wire
back thousands of dollars.
According
to a survey released Wednesday by the Consumer Federation
of America (CFA), nearly a third of all adult Americans have
been approached with fake check scams and at least 1.3 million
have fallen for it.
“They
didn't realize the pitch and the check were both phony until
they wired off the money,” says Susan Grant, CFA's director
of consumer protection. She says the average victim gets taken
for between $3,000 and $4,000.
Sally
Greenberg, executive director of the National Consumers League,
puts the yearly loss at $20 to $60 billion a year. Her group
runs the Web site fakechecks.org
. “These are very persuasive scams that play on people's
vulnerability,” she says.
Here's
another reason so many people get burned by these counterfeit
checks: They look legitimate. “They look so real your bank
teller can't always tell it's a fake,” says Allison Southwick
of the Better Business Bureau.
It
starts with that bogus check or money order
Why did you get that unexpected check or money order
for thousands of dollars? Maybe you've won a contest. Maybe
you hit the jackpot in a lottery. Maybe it's payment for a
work-at-home
job . The storylines are varied, but the con always works
the same way. You need to deposit the check and wire off most
of the money right away.
“Once
it's wired it's gone, gone, gone,” Greenberg says.
The
CFA survey pinpoints one reason why this scam is so successful.
Most people (59 percent of those responding) mistakenly believe
that when you deposit a check or money order, your bank confirms
that it is good before letting you withdraw the money. Forty
percent believed they would not be held responsible if the
check or money order turned out to be counterfeit. Wrong!
Many
victims tell me they asked their bank if the check “cleared”
before they wired the money and were told yes. Here's the
deal: When a bank says a check has cleared, it means you have
access to those funds. It does not mean the check is good.
If
the check bounces – which could take a few days or many weeks
– you are responsible to repay your bank for any of the money
you withdrew.
Bogus
checks can be used for almost anything. All the bad guys need
to do is concoct a story about why they sent you a sizeable
check and why you need to cash it and wire them money.
Here
are some of the most common fake check scam scenarios:
Prize
and lottery scams
“Congratulations!” the letter says. You've won a
bundle of money in a contest, sweepstakes or foreign lottery
– one you never entered. The letter looks official and comes
with a check for thousands of dollars. You're supposed to
cash it and wire off the money to pay for outstanding fees
or taxes. Don't do it!
Reality
check: You never have to pay to claim a prize. If
you're asked to wire off any money, it's a scam. More
on this scam .
Mystery
shopper scam
You answer an ad and are accepted as a secret shopper. Your
first assignment is to evaluate the MoneyGram payment system
at a local Wal-Mart store. The letter tells you to cash the
enclosed check – usually between $2,500 and $5,000 – keep
a couple of hundred dollars for yourself and use the MoneyGram
service to wire off the rest. Don't do it!
Reality
check: Never accept a job that requires you to cash
a check and wire money. No legitimate company would ever make
you do this. More
on this scam .
Overpayment
purchase scam
You're trying to sell something that's fairly expensive,
maybe a car or some furniture. So you place an ad in the newspaper
or online. Before long you get an e-mail from an eager buyer
who is willing to send you a check for more than the asking
price. You're supposed to wire the extra money to a mover,
decorator, shipping company or some other non-existent entity.
Don't do it!
Reality
check: You're being set up. No legitimate business
transaction involves a check for more than the asking price
with the requirement that you wire the difference to some
person or company. More
on this scam
Other
victims
Innocent businesses are also hurt by the fake check
scam. Many of these bogus checks use the name, address and
bank account number of legitimate companies.
This
increases the chance the teller will accept the check. Try
to deposit a big check from the El Gordo Lottery and the teller
might start asking questions. But a check from Bob's Auto
Supply doesn't call attention to itself.
“Often
businesses don't even know their checks are being used in
these scams until they get angry calls from people who want
to know where their prize money is,” says the BBB's Southwick
tells me.
A
few months ago, I
warned you about con artists sending out counterfeit Publisher's
Clearinghouse prize notices – along with fake prize checks.
Some of those fake checks listed the payer as Alpine Environmental
Services of Stanwood, Wash.
When
the bank realized Alpine's account number had been stolen
it locked up the company's accounts. The company's manager,
Dennis Dutoit, tells me he could not pay any bills for three
days until everything was straightened out. “It created a
major mess,” he says.
The
bottom line
It's not very hard to protect yourself from these
fake check scams. In fact, Carmen Christopher, an attorney
with the Federal Trade Commission, was able to sum it up in
one sentence. “If you get a check that requires you to wire
money – don't do it!”
Herb Weisbaum
MSNBC.com
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