Could you be a victim of fraud?

Hopefully you’ve at least heard of the Nigerian Scams. You receive an unsolicted email asking you to help move some funds from a dead diplomat and for your assistance, you’ll receive a nice sum of money for your trouble. Oh, but you’ll need to pay some fees (few hundred to thousands, but not to worry, you’ll be made over $1million so what’s a few thousand)… you’ll never see that money… the money promised or the money spent. Now, you’d never fall for that would you? Or the fake lottery winnings (you just need to pay some money to release your prize or get it through customs or whatever).

But, these scams can sometimes be a little harder to spot. There’s something in the back of your mind that says “Hey, this doesn’t sound quite right.”. Well, if you don’t listen to that voice, you could be out a lot of money.

So, here’s what happened to us this week. My husband has been trying to help his brother sell a large number of fish tanks that had belonged to our late nephew. They’ve been listed on Aquabid a few times, with no reasonable offers. Finally, a bidder steps up. Unlike ebay, there’s not a pay now button on this site. Payment is handled off-site by the bidder/seller. The first email sounds fine, interested in the tanks, can I pay by Cashiers Cheque (notice the spelling Cheque, not Check, not as common a spelling in the US, but not unheard of). I mention to my husband to be very careful, as there’s a good bit of fraud with Cashier’s Checks and that it could take 2 weeks to clear. Of course, he always thinks I’m quite paranoid about everything. But, something is nagging him just a bit or he wouldn’t have brought it up. So, he responds back to the seller that he’d take a Cashier’s Check. The next email is the one that causes the full red alert. The buyer now wants to send an extra $1000, have us send $900 of it to his shipper via Western Union as soon as we RECEIVE the check (he does actually capitalize the word receive). OK, this is a HUGE red flag. All auction sites and many banks will tell you that if the buyer wants to send you more than what you’ve asked for and send money elsewhere, end the transaction IMMEDIATELY. This will always be fraud. My husband tells me the new twist and I take a look at the email from our “friend” with a very english sounding name sending from a yahoo account with a very definite African IP address (if you don’t know how to check an IP address, contact your favorite geek and send the email as an attachment so the headers will be intact). My husband decides he wants to play with the scammer now and says that he’s fine with the arrangement but he’ll need to wait 2 weeks for the funds to clear. Of course our scammer is irritated and reminds him that the funds will clear in 3 days or less. DO NOT BELIEVE THIS. We contacted our local bank and they suggested 2 weeks, although some fraud prevention sites will tell you it can take even longer.

Answers to questions that we asked our bank:
If I deposit a cashier’s check, how long do I need to wait before I can be sure it’s good (we gave them the details of the “transaction”)?
They did say that the funds would be released into our account within a few days, but it could take 2 weeks for the check to be officially cleared by the issuing bank. They said that the cashier’s check would list security features on the back of the check, look at these features carefully and check to be sure they’re all there (if there are no security features listed, it’s a fake).

Would it be better to do a wire transfer?
NO, never allow a wire transfer from someone you don’t want to have your bank account numbers. (I had always been concerned about this myself and I was glad to hear the bank back me up on this).

Federal Trade Commission website: Check Overpayment Scams: Seller Beware

This scam has been going on for some time. In fact, you can see a similar story that dates back to 2002 here.

Remember, while you would never cheat anyone, there may be someone out there looking to take advantage of you. If you fall victim to a scam similar to this, and don’t have the funds to cover the amount of the loss (the amount sent back or sent to a shipper via Western Union), you could not only be out the funds, but spin into a devasting whirlpool of bank fees, bounced check fees, and bad credit. The scammers are smart, but we can outsmart them by being vigilante. If the tiny voice inside you says something is wrong, trust it. As the saying goes, if it sounds to good to be true, it probably is.