Member Fraud Awareness
Many people think they can spot and outwit a scam, but the truth is that scams become more savvy and sophisticated every year. You may not be able to keep up with every new scheme, but there are red flags for every type of potential fraud. Knowing some basics and being vigilant can keep you and your money safe from scammers. Below are a few of the most common scams to be aware of:
- Fake checks are on the rise due to lack of customer or member fraud awareness.
- Scammers use high quality printers and scanners to make the checks appear authentic, which at times may even contain watermarks.
- Fake checks are printed with both fake or legitimate names and addresses of legitimate financial institutions.
- Even though the bank, account number, and routing number listed on a counterfeit check may be real, the check can still be faked.
- These checks may take weeks after deposited or cashed to discover they are counterfeit.
Examples of Scams
Sweepstakes or lotteries
(foreign or domestic)
- A letter is mailed to the victim stating they have won a foreign or domestic lottery and the cashier’s check is included with instructions of how the funds must be allocated to cover the taxes and fees. The instructions will include depositing the check and wiring a portion (or possibly everything) of the funds back to pay the taxes and fees.
- Commonly done when selling cars or other valuable items through classified advertisements or online auction sites. The scammer writes a check more than the purchased price and asks the seller (victim) to wire back the difference.
- A job advertisement is posted (online or paper) to hire someone and be a secret shopper. The responsibility of a secret shopper is to evaluate the efficiency and effectiveness of an entity. The most common secret shopper scam is evaluating a money transfer service (e.g., financial institutions).
- The victim is given a check.
- Instructed to deposit the check to their bank account.
- Withdraw the amount deposited in cash.
- Take the cash to another money transfer service specified.
- Send the funds to a person or entity internationally or domestically.
- Evaluate the effectiveness of the process.
Work at home
- A potential tenant (suspect) reaches out to the landlord (victim) about the available space posted (online or paper). The suspect shows interests and states they expect to move in soon and informs the victim he plans to hire moving workers to move his furniture in. The suspect sends a check more than the rental fees and asks to wire the difference back to pay the movers.
- One common example would be processing payments. Scammers would send you the checks with instructions of depositing them in your bank account and sending them the money back minus your “salary or commission”.
(A.K.A. Sudden Riches)
- A letter is mailed to the victim explaining they have inherited money from a long lost great grandparent who recently passed on. However, the victim must deposit the cashier’s check attached with the letter and wire a certain amount back to cover taxes and customs fees associated with the inheritance in order to claim the funds.
- Meeting someone (suspect) online and in order to be with you, wiring funds to cover travel expenses must be done. At times, the suspect may even send the victim a check to be cashed in order to wire the funds back.
- Do not trust any offers that ask or “require” you to pay for anything back. If it’s free, you shouldn’t have to pay for anything back.
- Avoid getting involved with any foreign lotteries since it is illegal to play a foreign lottery via mail or telephone.
- Never send money to strangers and know who you are dealing with.
- If you are selling something, do not accept a payment more than the agreed amount no matter how tempting it is.
- If you accept check as a payment option, be certain to ask for a check drawn on a local bank or a cashier’s check. This way, you have an option of visiting or calling the local branch to verify the authenticity of the check.
- If the buyer insists that you send funds back, this should raise a red flag and you should consider ending the transaction immediately.
If You Think You’re a Victim