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Copyright © 2000 - 2008
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By Su Moran

From The Asian Reporter, V18, #17 (April 22, 2008), page 7.

By Su Moran

Wells Fargo

You consider yourself pretty savvy when it comes to protecting yourself and your family against fraud — right? You don’t share your Social Security number, you guard your credit card numbers, and you shred all your personal documents. You’re careful with telephone and mail solicitors.

Overall, you’re street smart about fraud. Are you also scam smart?

Fraud is a multi-billion-dollar-per-year "business," and more people are falling prey to scams each year, especially those involving the sale of items over the internet.

Crooks are even creating phony cashier’s checks and money orders to fool their victims. Not long ago, customs officials in Phoenix seized almost $1 million in counterfeit travellers’ checks, gift checks, money orders, and cashier’s checks in a three-week period.

This crime is not limited to large urban areas. Wells Fargo sees numerous instances in the Portland metropolitan area in which customers try to deposit money orders they thought were genuine, but which the alert team identified as fraudulent.

When endorsing an item and depositing it at a bank, a customer is guaranteeing it is legitimate and that the funds will be paid.

Even if a bank initially gives funds for a cashier’s check or money order that has been deposited, it can take up to two weeks or more for that check to clear. It can take even longer for a bank to determine whether a cashier’s check or money order from a foreign country is valid. If the item turns out to be phony, the check casher is responsible for paying those funds back to the bank.

Here’s how one popular scam works: A victim advertises an item for sale. A crook successfully bids for the item and sends the seller a phony cashier’s check or money order, for either the correct price or thousands of dollars more than the purchase price.

In the case of the latter, the crook says he made a mistake or is advancing funds to pay for shipping. The crook asks the seller to cash the check and to wire the "overpayment" back immediately. The victim, thinking he or she owes the fraudster money, cashes the check and wires the funds to the fraudster.

The crook’s cashier’s check or money order turns out to be fraudulent, and the victim is out the funds because he or she already sent the item they were selling and/or wired the phony "overpaid" amount to the crook.

And once the money has been wired, it’s usually gone for good. Most buyers are legitimate. But if a seller is overpaid and asked to return the "extra" cash, it’s almost certainly a scam.

Anyone who is uncomfortable with a transaction or suspicious about a check received should ask a financial services advisor for help. Do this before making a transaction so personal funds are not unwittingly jeopardized.

Be patient. Don’t push financial service institutions into dispensing cash immediately — wait until your bank has received the funds from that check before shipping the item sold.

The Federal Trade Commission also warns shoppers to use caution when making purchases from sellers they don’t know. Crooks defraud consumers by advertising merchandise, accepting payment, and not sending the merchandise. In an effort to dodge the authorities, fraudsters frequently change their reply-back information.

Here are fraud factors to keep in mind when shopping:

• Don’t do business with sellers who cannot be identified.
• Don’t give out personal information such as a Social Security or credit card number until the legality of the business, seller, and its payment service can be verified. Never, ever give out bank account numbers.
• Save all transaction information, confirmation numbers, and receipts.
• Learn what buyer protections the seller offers. Don’t assume one seller’s protections are the same as another’s.

If there’s a chance you have become a victim of fraud, immediately contact law enforcement agencies and financial services institutions for help.