Eight years . . .

Eight years ago this month my husband and I became victims of a counterfeit cashier's check scam when our bank told us that a cashier's check we received was good, clear, verified and that we would have no problems with it.  Off of that information, we went forward with a transaction.  One week later the bank contacted us to let us know that the check was counterfeit, and that WE were 100% liable for the money . . . even though they had told us it was good, clear and verified. 

It was this situation that brought us to create the website ScamVictimsUnited.com, where we warn people about scams, offer resources and advice, and allow people to talk with other victims on our message board.  In the first two years of our site being operational we helped stop over $2 million dollars from going into scams.

Now, you would think that eight years later things would have changed.  Some things have, but even today we see victims coming to our site who brought these checks to the bank and were told that they were good, clear or verified . . . sometimes by more than one bank employee . . . so the exact same situation that happened to us eight years ago is still happening to people today.

Until laws can be changed to hold the banks accountable for telling the customers that these checks are good, clear and verified and then later hold the bank customer liable when it comes back that they are NOT a true check, education is the best way we have to fight these scams.  

What can you do?  

Write to your law makers and tell them that you want to see banks held liable for releasing funds on checks that they have told customers are good, clear or verified, and then later reversed those words to hold the customer liable.  

Sign our petition to ask for stronger consumer protection laws.  If the banks are liable for the money lost, and not the customer, then they will change their practices and make SURE that every penny is accounted for before they release the money to the customer.

Contact your bank and ask them if you brought in a cashier's check for $4000, how long would it take to know you could use the money, with no worries about the check.  If their answer included terms like "clear", "good" or "verified' you may want to read the information we have on what these terms really mean, and then armed with that information you may want to speak to the bank manager about better education on counterfeit checks for his staff, or go and find a bank that already does understand these items and can therefore better protect you and your money.

No, you didn't win the Pepsi Lottery

Here is an email that got past my Spam filter.

This is to inform you that your e-mail has won you a total sum of £950,000.00 GBP (NINE HUNDRED & FIFTY THOUSAND POUNDS) in the Pepsi lottery of 2010. To claim your prize Contact Shaw Hendrick at: shawhendrick-pepsi@admin.in.th

Name:
Address:
Mobile No:
Age:
Sex:
Occupation:
Country:

NOTE: ALL REPLIES MUST BE ADDRESSED TO Shaw Hendrick: shawhendrick-pepsi@admin.in.th
Judith Hodge
Public Announcer

First, you have to enter a contest/lottery/sweepstakes in order to win.  Second, I am going to guess if there was a Pepsi Lottery going on, they would have ads EVERWHERE telling people about it.  Third, if this person really worked for Pepsi, they would have an official Pepsi Company email address.

So how does this scam play out?  I am going to guess that you will either be asked for your bank account information so that they can directly deposit your winnings, but instead will take everything from your account.  The other option is that they will send you a cashier's check for your winnings, and you will have to send a portion of that check back to them (maybe to cover legal fees for your winnings) but the problem will come AFTER you wire them the money and the bank calls you to tell you that the check is counterfeit and they now want you to pay them back.  You cannot just wait for the check to "clear" or be "verified" because even if the bank told you it was "clear" it can come back as counterfeit a week later . . . I know . . . that is what our former back told us!

For more information on Lottery Scams check out our website or talk with others on our message board.

What are they thinking!?!?!?

A fellow scam fighter alerted me to an article this past week about a new feature in mobile banking.  Soon you will be able to take a photo of a check with your phone and then get that check deposited into your banking account.  My first thought was that the banks need to fix the problems and issues that they already have with check deposits before they create a whole new way for people to deposit their checks.

The article says

Banks have already offered smartphone applications that let customers check  balances, transfer funds and make payments.

Yes, they do.  I have even heard some banks say that they can send you an email to alert you when a check has cleared.  If you read this blog on a regular basis, you will know that I have a big problem with the banks using the term "cleared" to customers.  Our bank told us that our cashier's check was "cleared" and then one week later they called us to tell us that it was counterfeit.

Back to the article that I was talking about.  It goes on to explain how this new technology would work.

A bank customer takes a photo of the front of the check and  the back of the check that has been signed by the customer. The photo gets sent  to the bank through its mobile application. In most cases, funds are in the  customers account immediately.

Wait a minute . . . immediately!?!?!  So now if someone were to take a picture of a cashier's check, they could start using that money right away?  What about waiting for the check to be verified at a legitimate check?  What about protecting the banking customer's funds by holding the check until it has passed through the system?  Oh wait, they don't do that now with paper checks so why would they do it with electronic image checks.

Here is the ONLY positive side I could see about this.  There are some people that have taken a cashier's check that they wanted verified into the bank and have been arrested for presenting a counterfeit check.  With this technology they could send a picture of the check into the bank instead of actually going into a branch location.  Of course, if the check is found to be counterfeit the bank could probably send the police to the person's house to arrest them for trying to pass a counterfeit check.

More banks are expected to add the feature, especially as consumers demand 24  hour banking.

I would think that those same customers who are demanding 24 hour banking would also demand that the bank is looking out for their best interest.  How about giving us accurate information on when the money from a check is truly ours to use and spend without any worries?  How about telling the customer that the funds are available, but it could take 10 business days or more for the check to be verified as legitimate.  That is what this bank customer demands.

Verify a check, and aviod being arrested

In the past, many places have advised that the best way to verify if a cashier's check is legitimate is to bring it into a branch of the bank it was issued by. The problem with this is that we are seeing an increase in the number of people being arrested for trying to defraud a bank when they do bring these checks into the branch locations.

So what is a safer option? Verify the check by phone, not by going into the actual bank. This way you can get the information that you need without the chance of looking like you are trying to cash the check and defraud the bank. Make sure that you do NOT call any phone numbers listed on the check itself, because these too could be fraudulent. Look up the phone number online or in the phone book and the call the bank and let them know that you have a cashier's check and would like to verify if the check is legitimate or that you are worried that it could be a counterfeit.

If you are sent a cashier' check for any reason, and are asked to wire any portion of it back to the sender or on to a third person, there is a 99.9% chance that the check is counterfeit.

http://scamvictimsunited.blogspot.com/

Vocabulary Lesson - Clear

Quite a while back, I wrote a "vocabulary lesson" about cashier's checks.

I wanted to continue on this to show why I believe the wording used by the banking industry is so misleading and why it is so easy for so many people to become victims of counterfeit cashier's check scams.

So let's say you receive a cashier's check from someone and you are concerned if it is a valid check or not. You want to receive the payment you are entitled to, and you do not want to end up liable for money from a bad check. This is the case with many people who become victims of counterfeit cashier's check scams. Many of them do not know how to make sure that a check is legitimate, so they bring it to their bank. They trust that the people who work with forms of currency every day will know how to make sure that this check is legitimate.

If the bank teller tells you that "the check will be clear in 24 hours" what does that really mean, and why is that confusing to the banking customer? Let's take a look at the definition of the word clear.

free from blemishes; unhampered by restriction or limitation; unencumbered by debts or charges; free from obstruction

"clear." Merriam-Webster Online Dictionary. 2009.
Merriam-Webster Online. 25 October 2009
http://www.merriam-webster.com/dictionary/clear

Banking: collection of funds on which a check is drawn, and payment of those funds to the holder of the check

"clear" Business Dictionaries from AllBusiness.com. 2009.
http://www.allbusiness.com/glossaries/clear/4949892-1.html

From reading these definitions one would think that when the bank tells you that an item, such as a cashier's check, is "clear" that would mean that you are free to use that money with no worry . . . it should be unhampered by restrictions and funds should have been collected from the bank on which the check was drawn according to the definitions I found online from reliable sources. So then why is it that banking employees will tell their customers that the check is "clear" in 24 hours, but then contact them a week later to say that the check was found to be counterfeit? You cannot un-ring a bell. If it is clear one day, it should still be clear a week later.

Maybe the real problem is not the word "clear" but the fact that it takes on average 7 - 10 business days for a check to go through the entire clearing process, but many bank's train their employees to tell people that cashier's checks are "clear" in 24 hours. If it is a legitimate cashier's check, then there would be no problems since it would be drawn against funds of the bank itself, but these checks are counterfeit and they are very good counterfeits, so good that they fool bank employees and bank managers on a daily basis.

So to make the vocabulary fit the situation, wouldn't it be better for bank employees to inform their customers that "it could take over 10 days for the check to clear". I know that the bank that we are currently with does this because I asked them before I opened an account with them. Test your bank out. Go in and ask them if you brought in a cashier's check how long would it take for it to clear. If they tell you 24 hours, you might want to rethink who you are trusting with your money.


Shawn Mosch
Co-Founder of ScamVictimsUnited.com
There is strength in numbers!

Find us on Twitter, Facebook and more through
http://www.retaggr.com/page/ShawnMosch

Support Scam Victims United by shopping at
http://shopittous.blogspot.com/

Education is the key

One of the common threads between many of the current scams, including Items for sale/ Internet Auction Fraud, Pet Scams/Puppy Scams, Secret Shopper Scams/Employment Scams, Romance Scams, Roommate/Rental Scams and even Lottery Scams, is that at some point the scammer will send the victim a cashier's check, money order or traveler's check. For some reason, the check will be for more than the agreed on amount, and the scammer will ask for the victim to wire that overage back to them. For many victims this will be a red flag, which it should be, so they take the next step and take the check to the bank . . . but this is where the confusion often comes into play.

To demonstrate my point, ask yourself this . . . if you deposited a cashier's check into your bank account, at what point would you feel safe that the check is legitimate, and that you can use the funds from it with no financial risk?

A) After 24 hours
B) In 7 - 10 business days
C) When the check clears
D) When the funds are made available
E) A and C
F) C and D
G) None of the above

If you said A, you would have become a scam victim. Many banks will tell customers that a cashier's check is verified in 24 hours. This is what our former bank told us when we deposited the check we received. Then, one week later, they called us and said that same check was now found to be counterfeit, and we owed them the money.

If you said B, you MIGHT NOT have become a scam victim, but it is still possible. As I just stated, our former bank found out that our check was counterfeit in one week, so we would have been saved, but there are some victims I have worked with that have seen there checks come back several weeks or months later. I was once told that a check could come back 6 months later, and the account holder would still be held liable.

If you said C, you would have become a scam victim. The term "cleared" only means that the clearing house has not sent the draft back for non-sufficient funds, closed account, or flag instructions on the account. It DOES NOT mean that the draft was written by the account holder, or that the money belongs to you.

If you said D, you would have become a scam victim. When you deposit a check into your account, your bank advances you the money for that check to keep the wheels of commerce moving . . . you cannot spend the money until you have it . . . so they credit your account with what is called a "provisional loan", which is a no-signature loan from your bank to you. This DOES NOT mean that your bank has been
credited by the issuing bank.

If you said E or F, I'm sorry, I only put those in there to try and throw a few people off. Since I have already shown you how A thru D are not correct, well, two wrongs don't make a right.

The correct answer is G, none of the above. The sad part is, the scammers know this, and they use that to their advantage. This is why these scams work so well. The scammers are using counterfeit cashier's checks, money orders or traveler's checks, that are so good that many bank employees cannot tell the difference. They have watermarks on them and are made on the same quality of paper, so they get passed into the system just like a real cashier's check would. It could take weeks before the item is detected as counterfeit, and by that time it is too late for the victim.

This is why education about scams, warning signs, red flags and banking procedure and terminology are so important in the fight against internet scams.

More on Secret Shopper Scams

For a listing of legitimate Secret Shopper companies, go to http://www.mysteryshop.org/

We have spoken with representatives at both Western Union and Money Gram. Money Gram does NOT use Secret Shoppers as a normal business practice. Western Union does use Secret Shoppers, but the shoppers are NEVER paid by cashier’s check or money order. If you have been contacted to shop Western Union or Money Gram, and it involves you receiving a cashier’s check or money order, IT IS A SCAM.

Often, the email address used by the representative of the company “hiring” you will be coming from a generic email address, and not one associated with that company. For further assurance, search out that company on your own and contact them for verification.

Shawn Mosch
Co-Founder of ScamVictimsUnited.com
There is strength in numbers!

Find us on Twitter, Facebook and more through
http://www.retaggr.com/page/ShawnMosch

Banking Terms - Not as "Clear" as they should be

One thing that I found out after becoming a scam victim is that the terms that banks use are words that give the customers a false sense of security. Here are a few things about banking terms that you should know.

What “Clear” really means:
“The check has cleared” does not mean the money in your account belongs to you. It only means that the clearing house has not sent the draft back for non-sufficient funds, closed account, or flag instructions on the account. It does not mean the draft was written by the account holder.

Depending on the size or purpose of the account, the account holder may not notice the absence of funds for several days after the draft has reached his bank. In fact, an account holder may have up to one full year to report an unauthorized draft.

Bank statements are usually sent out on the 1st or 15th of the month. If the transaction took place near one of those dates, the account holder may be unaware of the unauthorized transaction until statements are sent out the following month and time is taken to balance the statement.

The problem . . . when a customer brings a cashier’s check or money order from someone that they do not know into the bank, and the bank tells them that it is “cleared” (some times after only 24 hours) it gives the customer a false sense of security that they can spend/use that money, but this is not the case. If a problem comes up with this document, the bank will come back to the customer and demand that they refund the entire amount.

What “Available funds” really means:
“Available funds” does not mean the money in your account belongs to you, even if a hold has been taken off the draft.

When you deposit a check into your bank account, your bank advances you the money for that check to keep the wheels of commerce moving. Of the millions and millions of checks processed every day, a relatively small number are returned because of a problem; because of this, banks and credit unions must automatically credit depositor accounts within a certain number of days.
A bank or credit union can make an exception to the rule and wait for a longer period of time on any given deposit before crediting the depositor account, but apart from such an exception the credit is automatic. Again, this wording gives the customer a false sense of security about the authenticity of the document in question.

This credit to your account is called a “provisional loan” and is actually a no-signature loan from your bank to you. It does not mean that your bank has been credited by the account holder bank. If your bank HAS extended you a “provisional loan” and you normally had a very low account balance, or had been the type of customer who would be denied a loan if you apply for one with your bank, you should know that their are some scam victims who have fought back against their banks using this as their case.

The only time the money in your account really belongs to you is when the check or money order has been HONORED, meaning your bank has been credited (paid) by the account holder bank.

ALWAYS ask your bank if the draft has been honored and DO NOT TOUCH THE MONEY until it has.

When in doubt about a draft, tell your bank to send the draft for COLLECTION.

Some banks are starting to use the terms “The check is pending” when the money has been deposited into the account, but the check has not yet been honored.

Sending a draft for Collection:
When you send a draft for Collection, it means that your bank or credit union will not put any money in your account until the draft has been paid, i.e. your bank has received the credit from the account holder bank.

Your bank or credit union will charge you a fee and give you an approximate time before the draft is honored. This time period may be as long as 6 to 8 weeks depending on the location of the account holder bank.

Some banks and credit unions will provide the collection service even if you do not have an account with them, so long as you pay the service charge.

Shawn Mosch
Co-Founder of ScamVictimsUnited.com
There is strength in numbers!

Find us on Twitter, Facebook and more through
http://www.retaggr.com/page/ShawnMosch