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Protect Your Financial Investment: Beware of Counterfeit Check Scams

There are many variations of the fake check scam. It could start with someone offering to buy something you advertised, pay you to do work at home, give you an “advance” on a sweepstakes you’ve supposedly won, or pay the first installment on the millions that you’ll receive for agreeing to have money in a foreign country transferred to your bank account for safekeeping. Whatever the pitch, the person may sound quite believable.

Common Examples of Scams:

Nigerian 419 Scam: – This is the original scam from which all the others have developed. This scam involves the victim receiving a letter, fax, or e-mail from someone claiming to be a high level government official from a foreign country, commonly Nigeria. Sometimes they claim to be the wife of a high-ranking government official that has died or been killed. The individual tells the victim that they have a large sum of money, often from a U.S. contract with their country that they and their associates would like to invest in the United States. They seek the assistance of someone with a U.S. bank account to assist them to get the money into the country in exchange for a percentage of the money. If the victim agrees to help, they will be asked to wire money to pay expenses or to bribe officials to release the money. If the victim does not have the money, they will often be sent a check that they are instructed to cash or deposit and then wire the money (usually via Western Union or Money Gram). Of course the check is counterfeit, and comes back after the money has been wired. This scam can escalate to huge sums of money if the victim wires the “bribe money” from their own funds. This signals that the customer has money and can likely deposit a larger check without raising suspicion.

Inheritance Scam: – This scam evolved from the original 419 scam and has many of the same characteristics. As in the 419 scam, the victim receives a letter, fax, or e-mail from someone overseas, but this time they are writing to inform the victim that a long lost relative has died or been killed. The departed relative has substantial assets in the foreign country that they have left to the only surviving heir, the victim. From here the scam follows the 419 scenarios as attorney fees and such must be paid to claim the inheritance. If the victim does not have the means to pay the fees, they are put in touch with someone who will loan them the money. The loan comes in the form of a counterfeit check. Again, these scams have the potential to evolve into very large sums of money.

Internet Auction Scam: – Everybody loves e-Bay, including the scammers! This scam evolved from the 419 scam, but because it involved lower dollar amounts and new technology had a much higher percentage of success for the scammer. In this scam, the victim places an item for sale on the Internet (not necessarily on e-bay, often on local classified websites). The winning bidder contacts them to arrange payment, but there is a catch. The buyer is overseas and shipping needs to be arranged. Payment is sent in the form of a counterfeit check for thousands of dollars in excess of the purchase price. The buyer is asked to wire the excess money to the buyer’s shipper who will arrange pickup of the item (they are often told that there is a little extra money for them to keep for their trouble to sweeten the deal). The money is wired before the check comes back, leaving the victim (or their bank) out the money.

Lottery Scam: – This is now the most popular of the counterfeit check scams, probably because of the high level of success that the scammers have had with it. It is also very difficult to detect because the checks are usually lower dollar amounts (less than $3,000 in most cases). The victim will receive a letter or e-mail notification informing them that they have won a lottery or sweepstakes. Originally it was either the Canadian Lottery or the El Gordo Lottery in Spain; however, now they are using any manner of sweepstakes or lottery including the Publisher’s Clearing House. They are given a counterfeit check to finance the taxes and fees associated with collecting the prize. They are asked to cash or deposit the check and wire the money to an individual who is collecting the “tax”. The reason this is so successful is that it plays on an American dream. Also, most times there is a contact phone number that the person can call; of course it is the scammer himself on a non-traceable cell phone who is safely outside the U.S. The victims are also told not to disclose their good fortune until they collect their grand prize. The scammers have seemingly plugged all of the holes in their other scams with this one and it is very successful.

Work From Home Scam: – Another very effective counterfeit check scam is the work from home scam. In this scam the scammer places ads on job search sites or replies to those who post job wanted ads. Once hooked up with a victim, the scammer gives the details of the work. The scammer claims to be a foreign company that needs assistance in collecting their accounts receivable from their U.S. clients. All the victim is required to do is receive checks, deposit them, keep a percentage for themselves, and forward the rest of the funds via wire to their employer. Obviously the checks are counterfeit and the victim or their bank is left holding the bag.

Mystery Shopper Scam: – A variation on the work from home scam in which the victim is to be a “Mystery Shopper”. They are sent a counterfeit check and instructed to use the funds to complete several transactions, the largest of which is a Western Union wire transfer, and evaluate the service they receive. Of course the wire is sent to the scammer and the customer is left stuck with the bad check. This scam puts some pretty tight time frames for completion and urges the victim to keep their assignment secret from everyone. They have also printed fake bank phone numbers on the face of the check.

Charitable Organization Scam: – This is where the scammers sink to some of their lowest levels. They will surf the message boards of Christian organizations and gain the trust of an unsuspecting victim. They will claim to be a born again Christian who has a large sum of money that they want to invest in a Christian church or organization. From here it evolves into the 419 scam where money is needed to bribe government officials to facilitate the transaction.

Imposter Scam: – You get a call, email, or text out of the blue from someone claiming to be a family member or friend who says he needs you to wire cash to help him out of a jam – to fix a car, get out of jail, to pay a hospital bill, they have been robbed, or leave a foreign country. But he wants you to keep his request a secret from other family members and friends. There might be a second person in on the scheme – someone who claims to be an authority figure, like a judge, lawyer, or police officer. These scammers may claim that your friend won’t be allowed to leave the country unless you send money right away.

If someone contacts you claiming to be a family member or friend in trouble, check the story out with other people in your family or your friend’s family. You also can ask the caller questions that a stranger couldn’t possibly answer. Almost all of the time you will find your friend is not in trouble and are safe at home or work.
If you believe you’ve responded to an online scam, file a complaint with the Federal Trade Commission the FBI’s Internet Crime Complaint Center and the state’s Attorney General.

Tips to avoid fake check scams:

  • Never agree to pay to claim a prize.
  • Never agree to pay for grants.
  • Never agree to pay back an “overpayment” for goods sold.
  • Never agree to cash checks and send the money somewhere as part of a job working at home.
  • Never agree to wire money to anyone you have not met and known for a long time.
  • If it seems too good to be true it probably is.
  • If it seems suspicious don’t deposit it seek advice.