"Nothing in the form of a check is considered 'gold' anymore," First Financial Bank (FFB) Banking Center Manager Dave Wright said about banking institutions being notified daily of new scams. "Fraud and scams are everywhere. It is a much larger problem then the public can imagine. Although new technology is being created all the time to combat fraud, who knows what the status of checks or paper money will be in the future."
High-quality printers/scanners allow scammers to make authentic-looking checks, complete with watermarks, names and addresses of legitimate financial institutions, bank account and routing numbers. The check may look real enough to be accepted at a depositor's bank, but, when the check "bounces," the depositor becomes liable for the entire amount.
Financial institutions issue cashier's checks, traveler's checks and money orders using the institution's funds rather than those of the depositor who purchases the checks. This means the amount of a check quickly becomes available for withdrawal by the person who deposits it -- but not if a check is fraudulent.
Although it may take weeks, and in some cases up to a year, for a financial institution to discover a bogus check, the target of the scam may have already used the funds. When the bank attempts to recoup the funds from the account, the account holder could discover they owe the full amount of the cashier's check supposedly deposited in their account and any fees connected with the potential overdraft.
"Scam artists rely upon an average person not knowing how to spot a scam," FFB Security and Compliance Investigator Donn Penn said. "Scamming is universal, anyone can become a victim."
Both Wright and Penn provided The Brazil Times with information about what some of the more common scenarios of scams are.
An ever-growing scam takes place online at Internet auction sites. A person sells something over the Internet to a buyer, who sends a cashier's check for the agreed price. After mailing the item on good faith, the seller discovers the cashier's check turns out to be fraudulent upon presenting/depositing it in a bank.
The scammer profits by receiving the item without paying.
A similar Internet scam that has been "fancied up a bit," according to Wright, also takes place on the Internet auction sites.
A buyer sends a cashier's check for more than the purchase price and asks the seller to wire some or all of the excess funds to a third party, often in a foreign country, to satisfy obligations to the seller and pay the third party for transporting the item with a single fraudulent check. Many of these types of scams will offer the person a portion of the funds in payment if they do this.
Penn said people should bring in all the information involved in the transaction whenever they are attempting to cash any type of check from an unknown individual.
"When presenting a check, people shouldn't take tellers or bank personnel's questions personally," Wright said. "Please don't be offended by the questions, we are only trying to protect our customers from fraud. You need to bring in information and answer questions so banking institutions can investigate for fraud."
Another type of Internet and mail scam is the "too good to be true" notification of a financial windfall.
Scammers will send out hundreds of official-looking letters informing a person of their right to receive a substantial sum of money from winning a foreign lottery, being the beneficiary of someone's estate or by helping someone claim a portion of funds they themselves are unable to claim.
"Scammers will blanket and area with letters, or send hundreds of e-mails, in hopes of finding someone who will reply. They only need one person to follow through and they have made money," Wright said. "Most victims are people who have unexpectedly fallen upon hard times and are in need of cash, easy cash."
The letter will state a person must pay a processing/transfer tax or fee before receiving the money, but a cashier's check will be enclosed to cover that fee. The person will be asked to deposit the fraudulent cashier's check into their account and wire the fee to a third party, often in a foreign country.
"A lot of these scams are based in Canada, Spain, England and Nigeria," Penn said, adding that if a letter comes in the mail it will usually have a handwritten return postage address or none at all. "The real key to remember is this: If it requires that you pay a fee, send money back or forward funds to another party, it is pretty safe to say it is a scam."
Wright said these types of scams should be taken to local law enforcement or turned over to the person's bank to be investigated.
"There are times when people are ashamed that they have fallen prey to a scam and don't want to come forward, but the scammers can't be stopped if we don't know about them," Wright said. "The best thing to do when a person receives this type of mail is to use common sense and don't fall prey to it. Think about it for a minute. Did you enter into a lottery? Does this make sense that you would be given this opportunity? If you have any reason to wonder if this is legit, take it to a bank and find out. If not, then destroy it."
Another popular scam is recruiting mystery shoppers for what appears to be legitimate companies, but is actually bogus.
"You receive a letter informing that you have been chosen to act as a mystery shopper. The letter includes a cashier's check, and you are told to deposit the check into your account and use a portion of the funds to purchase merchandise at designated stores," Penn said. "A person could be sent a list of how much to spend and where to spend it at, then they are told to transfer a portion of the funds to a third party using a designated wire service company, and keep the remainder."
When the cashier's check turns out to be fraudulent, the person loses much more than just the money from the check.
"A person is also out the money they spent while shopping," Penn said.
A variation of this scam also includes a sheet requesting personal information from the person that is to be returned to the company so that they can become a mystery shopper.
"People should never respond to anything -- a letter, a fax, e-mail or a phone call -- requesting their identification or banking information," Wright said. "Scammers can use that to access their accounts and bleed them dry before they can notify the bank."