Scams Continue to Trip Up Consumers

by Leigh Gregg

A credit union member in Indiana fell for a pop-up ad's promise of discount coupons and lost $800 from her account at her credit union. A Canadian credit union is dealing with 23 incidents of fraud involving job offers. And banks and credit unions continue to see counterfeit checks.

Scams still are reeling in innocent consumers. Never, ever give your account numbers and other personal information to unsolicited callers, e-mailers, and pop-up ads. Here are several incidents reported to Credit Union National Association's News Now's Scam Squad.

Patty Gyoles, a member of Teachers Credit Union (TCU), South Bend, Ind., answered a computer pop-up ad offering discount coupons. The company, Star Communications, Canoga Park, Calif., asked for her share draft account number to process the transaction fee (South Bend Tribune). The result: withdrawals totaling nearly $800 and no discount coupons. She didn't close the account immediately because of other automatic bill payment commitments. TCU is reimbursing Gyoles for her loss. TCU security director Michael True says the credit union has taken steps to protect her accounts in the future, but "we can't protect people against themselves." The Tribune says Star Communications is also known as Consumer Reward Network, which received an F rating from the Better Business Bureau of Los Angeles. Attorney General offices in Indiana have received complaints, and several states' Attorney General offices have issued consumer alerts, an injunction, or cease-and-desist order against the company.

News Now's Scam Squad also has learned of these incidents:

• Ohio's Division of Unclaimed Funds recently issued an identity theft alert warning people to be on guard if they get a call or letter from the "Department of Unclaimed Funds" of Columbus. "The so-called 'Department of Unclaimed Funds' is not a government entity and has no relationship" to the Ohio agency, says Superintendent David Moore. The bogus organization contacts Ohioans, saying they have unclaimed funds waiting to be claimed. It asks for a credit card number to charge $80 to receive a claim form. It also asks for copies of driver's licenses and Social Security cards.
  "We can't protect people against themselves."
• Cornerstone Federal Credit Union, Carlisle, Pa., reported a check fraud in a scam that's been going on since early 2005, says the Pennsylvania Credit Union Association (PCUA) (Life is a Highway). The checks include the correct routing number, but each check shows a different account number. A Delaware name and address are used in cashing the checks, which are issued to various businesses and range from $90 to $3,000. PCUA says it has received calls for months about similar scams. Most credit unions haven't experienced losses because the checks are returned as "no such account"--unless the thieves hit on an actual account number.
• Peel, Ontario, police are warning of a new twist in stolen- and altered-check schemes: Offering a job via e-mail as a "financial intermediary." The culprits offer a percentage of funds to cash a check or money order. The victim acts as a collections intermediary for an alleged legitimate company by receiving checks and money orders supposedly collected by the company, depositing them into his own account, keeping a percentage as a fee, then forwarding the remainder to an address in another country. A Mississauga credit union's money orders have been scanned, altered, and issued to unsuspecting victims. The credit union is aware of 23 incidents, with a potential loss of $2.25 million (Canada Newswire).

The latest round of U.S. banks reporting counterfeit checks circulating under their name include:

Never, ever give your account numbers and other personal information to unsolicited callers, e-mailers, and pop-up ads.
• American Marine Bank, Bainbridge Island, Wash., displaying the routing number of 1251043865, which belongs to another bank.
• Chevron Credit Bank, National Association, Murray, Utah, displaying the routing number 031100209, which belongs to its check-issuing bank.
• Devon Bank, Chicago, displaying its own routing number (071004271) but with a black box in the upper right corner and blurred borders on the sides.
• Jewett City (Conn.) Savings Bank, displaying the routing number 211174330, which belongs to the bank. However, authentic checks have the number 102000979.
• Key Bank, National Association, Cleveland, Ohio, displaying the routing number 122037171, an incorrect address (23250 Pacific Hwy S, Kent WA 98032), and an incorrect phone number (1-866-909-9189).
• Principal Bank, Des Moines, Iowa, displaying the correct routing number, 073922623. Authentic checks bear the words "CASHIER'S CHECK" in the upper left corner, next to the bank's triangle logo and name. The counterfeit misspells the city, and is printed on multicolored check stock of light blue fading to light pink. Authentic check stock is yellow, green, tan, or blue.
• Somerset (Pa.) Trust Co., displaying the correct routing number, 043308691. On authentic items the words "TREASURER'S CHECK" are surrounded by a border with rounded corners. The counterfeit has an incorrect phone number below the city and state; no phone number is displayed on authentic checks.

Adapted from Credit Union National Association's CUNA News Now, a daily online news service for credit union staff.

Published March 20, 2006