Scams continue to evolve and become more sophisticated. However, there are several that continue to be favorites of scammers. Note that this is not an all-inclusive list and the scams listed below may take on different variations.
Sweepstakes Mail Scams
Fraud situation: You receive "official" notification that you're a winner. The scammer instructs you to send money, usually suggesting that you use a commercial money order transfer company like Western Union to wire the money. They claim the money is for a "prize tax" or "insurance" for your prize delivery.
How the scam works: The scammers convince consumers to wire money to "insure" the delivery of the prize. Or they are instructed to send lottery headquarters funds to pay a "prize tax" so the winnings can be released. In fact, no insurance company or lottery headquarters exists. Con artists take the money and disappear.
Counterfeit Cashier’s Checks
Fraud situation: You have a car that you would like to sell at an online sales or auction site. Someone contacts you from a foreign country and says that they are interested in purchasing your vehicle. You are asking $3,000. In order to pay for the vehicle, they suggest having a creditor in the U.S. that owes them $6,000 send you a cashier's check for $6,000. They ask you to deposit the entire check and then wire them the difference.
How the scam works: The buyer sends you the cashier's check for $6,000 and it appears to be a legitimate check from a legitimate financial institution. You deposit the check and then withdraw $3,000 and wire it by Western Union to the foreign address. Three weeks later the cashier's check is returned as counterfeit. Now the total $6,000 plus any fees is taken from your account to cover the loss and you may be suspected of fraud.
Unexpected Inheritance Scam (Also Used as Lottery Winnings)
Fraud situation: A person will receive an email that he has inherited a large sum of money from a Japanese business man (whom they've never met). After some correspondence, the email originator sends the victim a large check with instructions to wire the funds to a third party so they can open an account for them to deposit the rest of their inheritance. They advise that this needs to be done because the Patriot Act prevents them from transferring funds from a foreign country (this is not true).
How the scam works: In the next week to three weeks the cashier's check is returned as counterfeit and the member is responsible for the funds that were wired.
Questions to Ask Yourself
- If it seems too good to be true, it probably is. Trust your gut feelings - especially when you have a bad feeling about an offer or a company.
- If you want to buy something at an online auction, always check the references of the seller, and only buy from sellers who have good references. Almost all good auction sites have buyer and seller rating systems.
- Stick to trusted sources that seem to have reliable information. Large newspapers or government websites are generally more trustworthy than personal sites.
- Protect your personal information. Keep social security cards and birth certificates in a safe place at home. Don't give your credit card or social security information to anyone unless you initiate the transaction and are comfortable with whom you are dealing.
- If you receive a check that is suspicious, ask us to help you verify its legitimacy before depositing or cashing the check.