If it Sounds Too Good to be True...

By Jeanine Bader
March 27, 2008

There is an increase in scams affecting the US. There are many different variations but they all follow the same basic premise.

Scams depend on the victim depositing or cashing a counterfeit check and then wiring those funds back to the scammer. The victim is then left with a negative balance in their account that they are responsible for due to the returned deposited/cashed item. Below are descriptions of the most common scams:

• Internet Sales Scam: Victim places an item on the internet for sale. When the payment is received, it is in the form of a counterfeit personal or cashier's check and is for more than the agreed price. The victim is then asked to wire the over payment back to the purchaser. In most cases the scammer is just interested in the money and not the item sold.
• Sweepstakes/Lottery: This is the most common type of scam out there today. Victim receives an email or letter stating that they have won a lottery or sweepstakes that they did not enter. Usually it is a foreign lottery, but we see instances where they appear to be from the US. A portion of their winnings claiming to be for taxes and fees arrives in the form of a cashier's check with instructions to wire it to a specific place in order to receive the rest of their winnings. Letters include instructions for the victim to keep their winning a secret, especially from their financial institution or it will jeopardize their winnings.
• Employment Scam: Victim applies for a job they found on the internet or in the paper. The job is simple with very little work required. The job requires the victim to move money in and out of an account via wire transfer and pay is received by keeping a percentage of the money moved. These jobs are actually the back end of the classic Sweepstakes/Lottery Scam. The victim can even be held criminally responsible for participating in the scam and can face a trial, fees and even jail time.
• Inheritance Scam: Victims receive an email or letter saying their long lost relative that they never knew they had has passed away and left them their fortune. A counterfeit check is sent to cover lawyer fees before the inheritance will be released to them. The victim is instructed to pay the lawyer fees via wire transfer, only no inheritance ever comes and the victim is left responsible for the return item.
• Sympathy Scam: Victims of this scam receive letters, usually from other countries stating that the sender has a sick, dying or dead relative and they desperately need to have a negotiable instrument cashed. The money is usually urgently needed for medical or funeral expenses, but there is a problem cashing the items in their country because they are in US dollars. The scammer offers to give the victim a percentage of the cash as a fee just for cashing the items for them and wiring the rest back. These scams can also be done in person in parking lots where the victim is approached by someone asking for help.
• Relationship Scam: This type of scam is tied to the increased use of internet dating sites. A victim meets an individual on a site and over time really believes that they are dating. The scammer will spend several months pretending to be someone they aren't. The scammer builds the trust of the victim and either asks them for a loan or asks them to cash checks for them. When the scammer receives the money they were after, they disappear leaving the victim heartbroken and out the money.

It is important to realize that these types of scams can happen to anyone and with today's technology; very realistic counterfeit checks are being made, making it difficult for the credit union to identify them. The scammers are not discriminatory on who they target and because prosecution is difficult, the only way to stop a scam is to not participate in it. Just remember, if it sounds too good to be true, than it probably is!