Protect Yourself from Money Scams

The Better Business Bureau (BBB) said it has received reports of emails, appearing to come from Amazon.com customer service, with the subject line "Thank you for your order." The message has the Amazon.com logo and looks legitimate in other ways, at least on the surface.

The email lists an order number, total price, and a link to view the order. Someone receiving the message who had not ordered anything might click the link to see what he has mistakenly been charged for. Someone who had actually ordered something from Amazon might click the link because the price and item description is wrong.

Anyone who clicks on the link would be sent to a fake site where an attempt would be made to steal her personal information.

It goes without saying you shouldn't click on the link. Amazon.com requests that anyone receiving one of these bogus emails forward it to stop-spoofing@amazon.com.

Amazon.com said it never asks for Social Security numbers, tax identification numbers or other personal information as part of its transactions. It also said it never asks customers to confirm account information by clicking on an email link.

Counterfeit checks from the Wisconsin Department of Revenue are being used by at least one "purchaser" to pay for items sold through Craigslist.

"It appears that this is another fake check scam used to cheat consumers out of their money," said Janet Jenkins, Trade and Consumer Protection division administrator with the Wisconsin Department of Agriculture, Trade and Consumer Protection. "This fraud has been around for a long time but, every now and then there is a new twist which in this case, seems to be the use of fake Department of Revenue checks."

In this particular version of the fake check fraud, the person committing the fraud pretends to want to buy something that is for sale on Craigslist. This "purchaser" contacts a seller and arranges a sale. The fraudulent purchaser then sends a check to the seller in an amount that is greater than the selling price. The purchaser asks the seller to deposit the check promptly and then send the extra amount back to the "purchaser" using a money order.

The check issued to the seller ultimately bounces but, by that time the seller has already sent the money order. Neither the Wisconsin Department of Revenue nor the financial institution that cashed or deposited the fake check has any liability for the scam. The seller is the person who ends up losing money.

Consumer Protection offers a few simple tips to help consumers to avoid fake check scams:

• If someone sends you a check for more than the amount you're owed, the chances that it is a fake check scam are very high.

• Anyone who asks you to wire funds via Western Union, MoneyGram or any other wire service this is almost certainly a scammer.

• With today's computer technology, fake checks, including cashiers checks, and fake money orders are easy to make. If the name of the check issuer seems at all odd, talk to your financial institution.

• Make certain that the financial institution in which you deposited the check has actually received the money for the check before sending your money to someone else. The fact that the financial institution cashes the check does not necessarily mean that the institution has received the money for the check. Again, talk to your financial institution.

The Wall Street meltdown has many consumers worrying about their fiscal health and may leave them vulnerable to opportunistic scam artists who try to capitalize on the economic crisis with get rich quick, lending and other scams, the New York State Consumer Protection Board (CPB) warns.

New Yorkers are resilient, said Governor David A. Paterson, but we are facing difficult times and need to do everything we can to protect our assets. While we in government are working at the highest levels to ensure a sound fiscal future for the State, I have called upon State agencies to provide individual assistance for consumers. The Consumer Protection Boards 'Watch List' is a good 'heads up' for all of us as we deal with financial stress."

As scammers are salivating over this situation, we must take steps to protect ourselves from any bad apples who can potentially make matters worse, said Mindy A. Bockstein, CPBs Chairperson and Executive Director. The results of this financial storm are devastating and may be far-reaching, but we can weather the squalls if we are alert and careful. The best advice is — dont panic, use common sense, and educate yourself with accurate information before taking action. The preventive medicine approach can limit consumer risk.

Using various tools including phone calls, unsolicited e-mails or text messages to relay their information, scammers perpetrate crimes against unsuspecting consumers. They may make offers of assistance to provide loans or information, often charging fees for services or products that are never delivered or leading people to believe they have won money through lotteries, inheritances or other schemes designed to take advantage of vulnerable consumers.

While many use Phishing scams designed to obtain personal and financial information to commit identity theft and fraud, others use clever schemes to bilk consumers out of their hard-earned money. While not all offers and invitations are unscrupulous, consumers are urged to be wary of the CPBs Fiscal Crisis Watch List and note the following tips for protecting themselves as they navigate the uncharted waters of this financial crisis.

Watch List

The board has placed the following on its Fiscal Crisis Watch List for consumers.

Credit Counseling and Debt Management Scams

What to be wary of? Some credit counseling and debt management companies are charging high up-front or monthly fees, using pressure tactics for voluntary contributions, or failing to provide specific and upfront information about the services they provide unless consumers give personal financial information such as credit card and bank account numbers and balances. While reputable credit counseling agencies can help consumers better manage their money, some credit counseling services take advantage of people who are financially vulnerable.

Questionable Loans

What to be wary of? Legitimate credit and loan opportunities are becoming more and more difficult to come by in these times of financial difficulty. While most loans are bona fide, consumers are warned to be careful about some tactics that can leave them vulnerable and even worse-off in the end. The CPB urges caution on the following two loans:

Payday Loans

What to be wary of? Payday loans, also called cash advance loans are typically small ($100 - $500), short-term loans used to cover expenses between paydays. Interest rates on these loans may run as high as 400%. Payday loan creditors will often offer to extend the time to repay the loan and take that opportunity to apply additional charges to the original loan, resulting in consumers falling even deeper into debt. Consumers should be sure they can repay these loans immediately, as they are not solutions to long-term financial problems. Further, consumers should not take the first loan offered, but are advised to shop around, ask questions and negotiate terms.

Home Equity and Debt Consolidation Loan

What to be wary of? Home equity and debt consolidation loans can leave consumers vulnerable to increased debt, possible foreclosure and the loss of their home. Abusive lending practices associated with these loans include equity stripping. Equity stripping occurs in various forms of complex business transactions. A common equity stripping tactic is for a company or "investor" to grant a loan to a homeowner in exchange for the deed to their property. The homeowner is usually in or on the brink of foreclosure, and accepts the terms of the loan to stay in the property and pay "rent" as a tenant. However, the homeowner never pays down the mortgage and the property is stripped of any equity, leaving the homeowner vulnerable to eviction. Consumers are urged to check out loan institutions carefully, making sure banks are FDIC insured before taking a loan.

Work At Home Scams

What to be wary of? With unemployment on the rise, work-at-home scams are expected to increase. The CPB is urging consumers who receive offers to make big money while working from home to examine those offers carefully to be sure they know with whom they are dealing and get references and details before signing up. People should be especially cautious about unsolicited e-mail job offers as many of these are fraudulent and particularly skeptical of envelope stuffing schemes and offers providing payment in advance for work not yet performed. Once these paychecks are deposited, banking information becomes available to the alleged employer, who can deplete accounts. Additionally, many of these checks are fake, so consumers end up owing the bank for the full amount of the check deposited. The Federal Trade Commission (FTC) estimates that con artists pitching work-at-home schemes rake in more than $400 billion dollars a year.

Online Job Search Scams

What to be wary of? The CPB has noted an increase in the number of people conducting online job searches, and is warning consumers to be very suspicious of e-mail job offers looking legitimate but containing multiple grammatical and spelling errors, asking for personal information such as Social Security numbers or bank account information and requiring upfront processing fees for things like background checks as these can lead to identity theft. Particularly troubling for job hunters is a Phishing scam involving e-mails allegedly sent from websites where, after creating an account on sites like Monster.com or Careerbuilder.com, job hunters receive a response indicating a problem. These e-mails con readers into linking to a site, which then infects computers with viruses, worms and other harmful programs, leaving consumers without a job and without a functioning computer.

Investment Scams

What to be wary of? Consumers should carefully check all investment opportunity offers they receive to be sure that the offer is not a Phishing scam. In this scenario, an e-mail may be received from an alleged financial advisor claiming to be from a reputable institution with which the consumer already does business. Consumers should not respond to unsolicited e-mails. In at least one documented case, the sender was actually a scammer looking to siphon off information to enable the direct withdrawal of funds from the consumer account.

Preventive Measures

The CPB urges consumers to follow these tips to avoid schemes or scams.

1. GET INFORMATION UPFRONT AND IN WRITING and READ THE FINE PRINT.

2. ASK QUESTIONS about all offers received - - getting details on the terms, total price including any fees, interest rates, delivery dates for purchases, return or cancellation policies, and warranties for products and services. If it looks too good to be true, it probably is.

3. THINK CAREFULLY about every offer before accepting it. Take time to consider what youre planning to do. Do not act in haste. DO NOT let yourself be pressured into signing agreements. Make sure to RESEARCH companies, the offers they provide and their privacy and security policies and practices, and assure that there is an actual office, not just a mailbox or a website. Make sure the phone number matches the address given.

4. NEVER DISCLOSE credit card, bank account or Social Security numbers to someone who contacts you by telephone or Internet. Be wary of offers requiring the return of information in the form of a questionnaire or survey.

5. USE CAUTION WHEN CONSIDERING A LOAN, making sure to shop for the lowest fees and penalties and to borrow only as much as can be repaid.

6. DO NOT DEPOSIT a check or money order that you receive from a work-at-home offer or a sweepstakes.

7. NEVER PAY AN UPFRONT FEE in order to collect a lottery or sweepstakes prize. If they ask you for money before you can collect a prize, then its a scam. As a rule, DO NOT PAY IN CASH.

8. KEEP PAPERWORK, including copies of any complaints you file against a business. RECORD personal information using the CPBs Personal Identification Documentation (PIDD) card. DO NOT CARRY THIS CARD WITH YOU, but store it in a safe place where it can be accessed should your wallet or personal information be misplaced or stolen.

9. PASSWORD-PROTECT ACCOUNTS including financial and utility accounts and vital personal records using complex Personal Identification Numbers (PINs). Dont share these numbers.

10. CHECK YOUR CREDIT REPORT for fraud regularly through the three major credit reporting companies: Experian, Trans-Union and Equifax.

"The promise of easy money can be tempting, especially during these tight times," Cooper said. "But instead of making you any money, these scammers will take your money."

The "secret shopper" scam is a version of the counterfeit check scheme. Recently, at least 15 people per week have reported counterfeit check scams to Cooper's office.

One recent version of the scam starts with an advertisement in the newspapers or on the Internet, a telemarketing call, a letter or an email that promises you well-paying work as a secret or mystery shopper. People who respond are sent a real looking check, asked to deposit it and then wire the money back as a way to evaluate the wire service company.

A few days later, the check turns out to be fake, meaning that victims have wired away hundreds or thousands of dollars of their own money.

A related scheme claims to offer work as a payment processor for an overseas company. Consumers who respond are sent money orders or checks to deposit and then asked to wire the funds back to the company. In exchange, they're promised 10 percent of the money. Once the funds have been wired, the money order or check turns out to be fraudulent.

"The latest versions of this scam take advantage of people who are looking for work or extra income during a slowing economy," Cooper said.

Consumers also report getting fake checks in response to items they've posted for sale in newspaper classified advertisements or on web sites such as eBay or craigslist. Victims are sent a check for more than the asking price on their item for sale and asked to wire back the extra money.

People also continue to get counterfeit checks that come with an announcement that they have won a lottery or sweepstakes prize. They are told to use the check to cover taxes and fees on their prize. Again, once the check has been deposited and the funds wired away, the check turns out to be counterfeit.

Counterfeit check scams are popular with international fraud rings. With recent advances in printing technology, crooks can make fake checks and money orders that look very convincing.

"If someone sends you a check and asks you to cash it and wire money back, don't do it, no matter how real it looks," Cooper said. "What seems like a windfall will only end up costing you money."

More Scam Alerts ...

When international postal inspectors arrested 77 people in a crackdown on counterfeit checks, they exposed once again the tip of an iceberg that is one of the biggest scams facing consumers today: the phony sweepstakes.

The eight-month probe involved schemes in Nigeria, the Netherlands, England and Canada, and has stopped more than half a million fake checks from being mailed to American victims.

International scammers have found U.S. consumers easy prey and are increasingly targeting them.

"All fake check scams have the same common pattern: Scammers contact victims online or through the mail and send them checks or money orders. They then ask that some portion of the money be wired back to them," said Postmaster General John Potter.

In its most common form, victims of the phony sweepstakes scam get a letter notifying them that they are a big winner in a lottery. They may even get the prize check in the mail with the congratulatory notice.

All you have to do to become a big winner is deposit the check and wire money to the sender to cover some taxes and fees. Sounds easy, doesn't it? Most consumers realize that it is indeed too easy, and recognize this as a fraudulent fake check scheme.

However, Arkansas Attorney General Dustin McDaniel says some consumers continue to fall for it, because they want to believe that its for real. The check sent to the victim is the bait that tempts them to fall for the scam.

But no matter how authentic the check looks, it's not. Consumers who deposit the checks into their accounts and authorize the wire transfer soon learn that the check didn't go through and that they cannot get the wired money back.

Banks are not responsible for covering phony deposits and will not excuse depositors from making good on the bad check.

"Scammers now have high-tech printers and scanners that allow them to make checks that look real. When you combine this technological sophistication along with a false promise of a financial windfall, consumers can easily fall victim, said McDaniel. The simple thing consumers should remember is that if it sounds too good to be true, then it probably is, and they should do their homework and ask questions prior to taking any action.

To avoid falling victim to a counterfeit check scheme, here are some tips to remember:

• Don't try to collect lotto or sweepstakes winnings if you don't remember entering the contest;

• Never give out your personal bank account information to anyone you don't know and don't trust;

• Never accept money without knowing its source;

• Never send money to an unknown source; and

• If you take the check to the bank, ask that it be verified and do not withdraw your own funds until the check has cleared, a process that can take days or even weeks.

More Scam Alerts ...

In response to these scams, the U.S. Office of the Comptroller of the Currency has issued an advisory, outlining ways consumers can avoid becoming victims of scams involving cashier's checks.

In most of these cases, individuals receive a cashier's check and are asked to deposit the check into their account, wait until funds become available and then wire some part of the funds from their account to a third party, often in a foreign country.

Although the amount of a cashier's check quickly becomes "available" for withdrawal by the consumer after the consumer deposits the check, these funds do not belong to the consumer if the check proves to be fraudulent. It may take weeks to discover that a cashier's check is fraudulent.

In the meantime, the consumer may have irrevocably wired the funds to a scam artist or otherwise used the fundsonly to find out later, when the fraud is detectedthat the consumer owes the bank the full amount of the cashier's check that had been deposited.

A cashier's check is an instrument issued and sold by a bank, and is a direct obligation of the bank. For decades, cashier's checks have been used as a trusted form of payment to consumers for goods and services.

There are a number of known scams involving cashier's checks, many involving an unexpected windfall.

In one, the victim is advised that he has won a foreign lottery and that the proceeds will be sent to him once the taxes or fees are paid. A cashier's check is provided to cover those charges, and the victim is asked to deposit the check, wait until it clears and then wire funds to cover the taxes and fees. In most cases, the wire transfer is directed to an account in a foreign bank.

Although funds represented by the cashier's check may be made available to the customer the next business day, and funds availability may be referred to as a check "clearing," funds availability is not a determination that the check is legitimate. Fraudulent checks can be very difficult to detect, and it may take several weeks for a fraudulent check to be returned to the customer's bank.

When the check is returned, the bank reverses the deposit and withdraws the funds from the customer's account. Wire transfers, however, represent an instantaneous and irreversible transfer of funds. If the individual has already wired money to a third party, those funds cannot be recovered by the bank.

While it can be very difficult for consumers to know if a cashier's check is fraudulent, the OCC guidance details a number of specific steps consumers can take to protect themselves, including these:

• Try to know the people with whom you do business. When possible, verify information about the buyer from an independent third party such as a telephone directory. Be cautious about accepting checks even a cashier's check from people that you do not know, especially since it may be difficult to pursue a remedy if the transaction goes wrong.

• When you use the Internet to sell goods or services, consider other options such as escrow services or online payment systems rather than payment by a cashier's check.

• If you do accept a cashier's check for payment, never accept a check for more than your selling price if you are expected to pay the excess to someone else. Ask yourself why the buyer would be willing to trust you, who may be a perfect stranger, with funds that properly belong to a third party.

• A cashier's check is less risky than other types of checks only if the item is genuine. If you can, ask for a cashier's check drawn on a bank with a branch in your area.

• If you want to find out whether a check is genuine, call or visit the bank on which the check is written. That bank will be in a better position to tell you whether the check is one they issued and is genuine.

• Know the difference between funds being available for withdrawal from your account and a check having finally cleared. Your bank may be required by law to make funds available to you even if the check has not yet cleared. However, it could take several weeks to know if the check will clear or not.

More Scam Alerts ...

It's seldom a good idea to take part in an online survey, and a new email phishing scam underscores that point.

Consumers report getting emails purportedly from Chase Bank offering them $100 to take a two-minute online survey. Police say it's simply the latest twist in an online identity theft scam.

The email appears to be from Chase Bank's customer service department and tells the recipient they have been selected at random for the survey offer.

All they have to do is answer a few questions and the bank will slip an extra $100 into their account. The questions inevitably get around to the victim's personal financial information.

Of course, the offer is a fraud. Chase Bank says it would never solicit sensitive data through an email.

The bank is a frequent disguise for fraudsters, since it is so large and also has millions of credit card customers.

Consumer advocates say anyone with a Chase account might fall for the scam unless they stop to think first -- and reject any request that they take part in an online survey.

Fake check scams are defrauding thousands of Americans. The National Consumers League reports that fake check scams are now the sixth most common Internet fraud, with consumers losing an average of $5,000 each.

There are many variations on this popular scam. Many start with an e-mail contact, with a stranger proposing to send the mark a check and have him wire money in return. Susan Grant, director of NCL's National Fraud Information Center, says it may start with someone offering to buy something you advertised for sale, pay you to work at home, or give you an advance on a sweepstakes you supposedly won.

Whatever the set-up, the bottom line is if someone you don't know wants to pay you by check but wants you to wire money back, it's a scam.

The crooks often claim to be in other countries and say it's too hard to make payment directly, so they'll have someone in the U.S. who owes them money send the victim a check. The amount of the check is more than the victim is owed, so the victim is instructed to deposit the check and wire the excess back. Or scammers may tell the mark to wire some of the money back as fees to collect their "winnings."

The checks sent to victims are forgeries, but they're so realistic that even bank tellers may be fooled. By the time the checks bounce, the victims have already wired the money to the crooks. Because bank customers are responsible for the checks they deposit, the victims of these scams are left to repay the bank the money they withdrew against the bad check.

American Bankers Association Executive Vice President Edward Yingling explains that federal law requires banks to make the funds you deposit available quickly. But he adds that it's important for consumers to know that just because you can withdraw the money doesn't mean the check is good. If the check turns out to be a forgery, the bank will reclaim the money later.

Some tips on avoiding this and similar scams:

• There's no legitimate reason for someone who is giving you money to ask you to wire money back;
• Just because you can withdraw the money doesn't mean the check is good, even if it's a cashier's check; • If a stranger wants to pay you for something, insist on a cashier's check for the exact amount, preferably from a local bank or one with a branch in your area.

For more details about how fake check scams work and how to avoid them, visit the telemarketing or Internet fraud section of www.fraud.org.

Consumers should watch out for a scam in which swindlers buy items on the Internet with counterfeit cashier's checks greater than the purchase price and then ask sellers to return the difference. The bogus check bounces, leaving the seller owing the bank the entire amount.

The scam artists, usually from overseas, typically target online sellers of expensive items, such as cars. In a variation of the scam, consumers receive calls telling them they have won a large prize and telling them to remit part of a cashier's check to pay expenses.

"Consumers selling items on line should immediately reject offers to pay with cashier's checks greater than the agreed-upon price," said Connecticut Attorney General Richard Blumenthal, whose office uncovered the scam.

"These seemingly simple transactions are scams intended to relieve sellers of their cash. A buyer or business has no legal or legitimate reason to send a check larger than the sale price," Blumenthal said. "Alarm bells should go off the moment someone from overseas offers to pay with a cashier's check. Wiring cash from a cashier's check will line the scam artist's pocket while picking yours."

Phony buyers sometimes offer explanations for the cashier's check being greater than the purchase price. The purchaser may claim the check was mistakenly made out for a greater amount, is a refund from an unrelated transaction, or includes transportation or import/export fees that need to be refunded. The scam artists typically ask the seller to wire money to a foreign country via Western Union.

In another scenario, the swindler claims that he has to pull out of the deal because of a tragic accident or other unforeseen circumstance and asks for a refund of the cashier's check. He may even offer to let the consumer keep a small amount of the payment as compensation for the inconvenience.

Steps consumers can take to avoid such scams include:

• Read all alerts related to Internet sales.
• Be wary of prospective buyers who send e-mails from overseas, want to pay more than the purchase price and ask pay by cashier's check but then cancel the transaction and ask for a refund.
• Do not assume that the cashier's check has cleared and is not counterfeit even if your bank says that funds are avialable.
• Do not withdraw cash or write checks on any cashier's check until the check has cleared, and there is no risk that you will have to reimburse the bank.
• Check with the bank which issued the cashier's check. Aask if it has had problems with counterfeit cashier's checks.

If you are the victim of a counterfeit check cashing scam, submit your complaint to FDIC's Special Activities Section, 550 17th St., NW, Room F-4040, Washington, D.C. 20429, or send your information electronically to alert@fdic.gov.

Paying bills is never easy, but job loss, divorce or unexpected medical bills can be devastating to a consumer. Many consumers seek help from non-profit credit counseling organizations in managing their debt or "repairing" damaged credit.

But consumers must be cautious when choosing a credit counseling organization. Many credit counseling organizations provide valuable advice, education, and assistance to those seeking to better manage their debt. But an increasing number of complaints indicates that some organizations are engaging in questionable activities.

Federal and state regulators say they're concerned that some credit counseling organizations using questionable practices may seek tax-exempt status in order to circumvent state and federal consumer protection laws. State and federal statutes regulating credit counseling agencies often do not apply to Section 501(c)(3) tax-exempt organizations.

"Many of these groups provide a valuable service to consumers, but some use the tax code to skirt consumer-protection laws," said IRS Commissioner Mark W. Everson.

"The IRS will work to protect the integrity of the tax law to ensure that tax-exempt organizations understand and comply with the rules. We will work with other federal agencies and state regulators to combat abuse in this area. It is not fair to taxpayers struggling with financial problems to be taken advantage of by credit counseling groups exploiting gaps in the law."

Consumers need to be wary of the "quick fixes" offered by some organizations.

"Consumers who are struggling financially need to be careful not to lose even more money to someone offering a quick and easy way to fix credit problems," said Timothy J. Muris, Chairman of the FTC. "We want all consumers seeking help to take some common sense precautions."

Consumers can help protect themselves from deceptive credit counseling practices by following these tips:

• Check that the organization will help you manage your finances better through counseling and education.
• Carefully read through any written agreement that a credit counseling organization offers. It should describe in detail the services to be performed; the payment terms for these services, including their total cost; how long it will take to achieve results; any guarantees offered; and the organization's business name and address.
• Beware of high fees or required "voluntary contributions" that, with high monthly service charges, may add to your debt and defeat your efforts to pay your bills. It is illegal to represent that negative information, such as bankruptcy, can be removed from your credit report. Promises to "help you get out of debt easily" are a red flag.
• Make sure that your creditors are willing to work with the agency you choose. If they are, follow up with those creditors regularly to make sure your debt is being paid off.
• Check with state agencies and your local Better Business Bureau to find out about a specific credit counseling organization's record. A list of helpful Web sites appears at the bottom of this release.

"State charity officials are working with other state and federal agencies to remedy abuses in this area, and to assure that nonprofit credit counseling organizations operate in accordance with the charitable trust or non-profit corporation laws under which they are formed," said Mark Pacella, president of the National Association of State Charity Officials (NASCO).

To address some of the concerns, the IRS has stepped up its enforcement efforts to ensure that existing Section 501(c)(3) organizations are complying with the applicable rules and regulations. Further information and background can be found in IRS Fact Sheet 2003-17.

IRS, FTC, and NASCO regulators recommend that consumers considering using the services of credit counseling organizations check the following Web sites for useful information:

• www.ftc.gov - Become familiar with the latest scam alerts;
• www.irs.gov/charities - Determine whether the organization is tax-exempt and what an organization must do to maintain that status;
• www.nasconet.org - Obtain a list of state charity official offices;
• www.treas.gov/financialeducation - To find more information on federal financial education programs and resources.

If consumers believe that they have been victims of credit improvement fraud, they should immediately file a complaint with the FTC by calling toll free: 1-877-FTC-HELP, or online at www.ftc.gov.