Don't let fake check scams fake you out

NEW YORK (11/12/08)--Scam artists are using legitimate and familiar names--such as Publishers Clearing House, Martha Stewart Living, and Oprah Winfrey's O Magazine--to lure you into falling for a fake check scam, and you're left holding the bag (MSNBC.com Oct. 30).

How do fake check scams work? There are many variations, but all involve someone asking you to deposit a realistic-looking check and send money elsewhere in return.

In the Publishers Clearing House scam, the fraudster promised a $15 million sweepstakes award to one unsuspecting victim--as soon as she covered $5,889 in fees with the "advance check" the sweepstakes sent her.

She discovered the check was a fraud only after wiring the "fee money" and draining her bank account of nearly $6,000.

Federal law requires you to have access to funds from deposited checks or money orders within one to five days. The check processing, however, can take weeks or months, giving a thief ample time to take your money and run.

You are responsible for any transactions you make--whether you're wiring money or depositing money orders or checks. Many consumers have seen thousands of dollars in losses.

In addition to the "Sweepstakes Scheme," watch out for these phony offers, warns fakechecks.org:

Scheming suitor. Scammers find a way to your heart--by befriending you, using children, or employing the word "love"--and then ask you to cash a fake check as a favor. There's no reason the crooks couldn't use their own financial services provider to do so.

Overpayment offer. Crooks offer to buy something you are selling, but send you a check for more than you are asking. They then ask you to wire them or another party the difference. Some will claim they sent the wrong amount by mistake.

Work at home offer. Con artists posing as employers hire you to work from home, and ask you to help them "process payments for clients" as part of your job. You end up depositing bogus checks and sending the money back, minus your "pay." This isn't how legitimate companies do business.

Foreign business offer. Scam artists offering you a foreign business deal send you a check or money order and ask you to send back a portion for taxes, customs, bonding, processing, legal fees or other expenses that must be paid before they can send you the rest.

Remember: There is no valid reason for a person who is giving you money to ask you to wire some back. If you are doing business with strangers, have them write a cashier's check for the exact amount. Also, be wary of an offer arriving by regular mail, phone, fax, or e-mail. Legitimate checks will arrive via certified mail.

You can report fake check scams to the National Consumers League Fraud Center, at fraud.org.

For more information, listen to "What You Should Know About Fake Check Scams" in Home & Family Finance Resource Center.

courtesy of cuna.org