New website tries to fake you out

by Center for Personal Finance editors

WASHINGTON (10/16/07)--Think you're too savvy to fall for a fake check scam? Don't be so sure. Since January, investigators, led by the U.S. Postal Inspection Service, have seized more than $2.1 billion in counterfeit checks bound for the U.S. (U.S. Postal Service Oct. 3).

This eight-month global fraud crackdown, involving officials of the U.S., Canada, Nigeria, the United Kingdom and the Netherlands, has led 77 arrests.

Fake check scams involve someone you don't know offering to send you a large sum of money but requesting that you wire or send a portion of the money back. Fall for this and you could be out thousands of dollars. By cashing the check, you'll be responsible for repayment once the check bounces.

As part of a public awareness campaign, the National Consumers League (NCL), a consumer advocacy group in Washington, D.C., has launched fakechecks.org to warn and educate consumers about the different types of counterfeit check scams. The site includes videos of possible scams, a quiz to see if you could be faked out, and advice about preventing scams.

"Since we added a fake check category to our database in late 2003, these scams have become the top telemarketing fraud and the second most common Internet fraud reported to us," said Susan Grant, director of the NCL's Fraud Center. "The average loss is between $3,000 and $4,000--a significant amount for most people. As one victim put it, it's the cost of the used car she was saving to buy.

"Because consumers are responsible for the losses if the checks or money orders they deposit prove to be phony—a fact that many people don't know until it's too late--it's crucial to fight fake check scams with education as well as enforcement. That's why we created the new website," said Grant.

The NCL advises asking yourself why someone you don't know would offer to give you money, or give you more than you're owed. Be on guard for these schemes:

• Overpayment schemes. Crooks offer to write a check for more than the purchase price for items you've advertised in your classified or online auction posting.

• Foreign lottery schemes. Crooks send a letter claiming you've won and a check for part of your winnings, but they ask you to pay "taxes" or other fees to get the rest of the money.

• Working-from-home schemes. Scammers send e-mails asking you to work from home as an "account manager" processing payments. They then dupe you into depositing fake checks and sending them real cash.

• Foreign-business-offer schemes. Con artists ask you to help move a fortune to the U.S. for safekeeping. They send you a check but tell you they need money from you to transfer the funds.

• Rental schemes. Scammers falsely claim to be moving to the area, give the landlord a check for rental deposit, then claim they have unexpected expenses and ask for some of their deposit back. They never move in, and the check doesn't clear.

• Love-of-your-life schemes. You meet that perfect person through an online chat room or dating site, but he or she needs you to cash a check and send the money so you can meet.

Many different schemes prevail, but one thing is sure: You've been scammed and you'll be out money.

For more information read, "If It Looks Too Good to Be True ... Recognizing and Preventing Mail Fraud" in Home & Family Finance Resource Center.

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