Scams on the Internet and via U.S. Postal mail are thriving and they’re still finding victims every day, even here in Rochester, MN! I was shocked when I heard that even in our town, people are attempting to deposit cashier’s checks, sending money overseas back to Nigeria and elsewhere, and expecting a big payout of money to their account. I even heard of one person being told by police the check they have is a scam, and yet the next day they tried to cash it again! Personally, I don’t get it! Perhaps desperation for the money drives people to abandon common sense? The rule of thumb is, if it looks too good to be true, it is!
I am going to walk you through the basics of an Internet “advanced-fee scam”, and remember, there are a million variations of this floating out in cyber space. Then I’ll tell you who I really think is at fault (it may surprise you!)
Step 1 You get a surprise letter or e-mail
The first clue that you are being lured into a scam is the fact you get a letter out of the blue offering you money. Nobody just has money laying around to share with random individuals. Nobody! At this point hopefully most people have deleted this e-mail and laughed it off, but there is enough people that don’t to make it profitable for scammers to keep doing this.
The e-mail will usually say something about you winning a lottery, or you helping some foreign business get money out the country, or one of many different variations on those themes. People that reply and take the bait then get suckered into a deeper story.
Step 2 You get a cashiers check. Yay free money!
If you get a letter in the mail, usually it will already include a cashiers check to seem more legitimate. If you get contacted via e-mail, they will usually send you a cashiers check after you reply to their message. At this point, people lose all common sense and start to think of what they can spend that money on. All you have to do is wire half of it back to a foreign account after you deposit it, what could go wrong, right?
Cashier’s Checks are WORTHLESS, until they clear!!
The biggest failure in this chain of catastrophe is the fact that a bank will give you the money from a cashier’s check before they know if it is legitimate. With technology as advanced as it is nowadays, I don’t think there is any excuse for banks to not verify if a bank is legitimate and if there are funds available. I can see why they give the money out, because they’re not on the hook. If it does not clear, they come after you! It seems like a failure of the system though to allow this to happen, especially at the scale at which it is happening now.
Step 3 You send money back to the scammer, then the bank calls.
“I’m sorry, the check you cashed did not clear and your account is overdrawn by three thousand dollars. We have filed a fraudulent claim on your account and … “. You thought that the money was all good, your account balance was nice and high, or you even got in cash in your pocket. Well, the truth is the bank takes up to a week to determine if that check was good, and if it wasn’t, then they stick you for the bill, overdraft fees, and perhaps even fraud charges. Not a good deal!
In summary, nobody is giving away free money. Don’t fall for these predatory scams! If you want to find out more, you can google “internet scam” and come up with hundreds of links, examples, and stories of people that have been victimized by this crime.
Here are some resources for you to check out:
- To report a scam: http://www.ic3.gov/
- Nigerian scam example: http://www.scambusters.org/NigerianFee.html
- Stories of victims: http://www.lookstoogoodtobetrue.com/stories.aspx
I would like to see banks reform the way they do business, which could solve this problem all together! I don’t think they have any incentive to right now, because they can come after the victim easy enough. Perhaps when scammers are up to bilking billions of dollars from us, maybe the regulatory bodies, government, or whomever will notice and make changes. I won’t hold my breath too long.