In general, the fraud unfolds like this: A consumer is part of a fairly large financial transaction with someone who generally says that they live outside of the United States. The types of transactions that have been reported include payments for large items purchased through online auctions, deposits for apartments, and fees for nanny services, for example.

The so-called “buyer” sends an official-looking cashier’s check to pay for the service. The consumer, then, takes the check to the bank and cashes it.

There are two ways the scam can unfold: In the first, the buyer sends a check for well over the amount of the purchase (with some excuse about why) and asks the consumer to immediately refund the difference once they’ve cashed the check. In the second, the buyer waits a day or two (but only a very short time) and makes some excuse for canceling the transaction and asks the consumer to wire all of the money back.

A similar scam suggests that the consumer has “won” a lottery or other prize but must send some of the proceeds of the check back for some specific reason, like processing or taxes.

The counterfeit cashier’s checks are such good reproductions that they’re difficult to spot, even by experienced financial professionals. Despite the fact that the consumer’s bank cashes the check, it will not be honored when the bank presents it to the “issuing” institution for payment. The bank then requires the consumer to return the funds.

The problem is that by the time the fraudulent check works its way through the banking system (which can sometimes take more than 30 days), the con-artist has already taken the consumer’s money.

You can protect yourself by:

• Understanding that when cashing a cashier’s check, even though the bank has provided you with the money, you are responsible for the funds until your bank has received the proceeds from the institution which originally issued the check

• Being cautious of transactions with people you don’t know who purchase items via cashier’s check

• Avoiding any situation where someone pays more than the purchase price of an item and demands that the extra money be returned

• Being suspect of any cashier’s check that just shows up in the mail, especially if it has a “congratulations” letter attached

• Holding any funds provided by cashier’s check from someone you don’t know for 30-45 days before using those funds, especially when you have any sense that the transaction is out of the ordinary.

If you believe that you have been the victim of this type of scam, please call the Pennsylvania Attorney General’s office at 800-441-2555, the U.S. Secret Service at 202-406-5850 or the Pennsylvania Department of Banking at 800-PABANKS.

FDIC Special Alert: FRAUDULENT EMAIL

January 26, 2004 – The FDIC has issued a Special Alert. Fraudulent emails being sent to bank customers! The fraudulent email, which appears to come from the FDIC, informs the recipient that all deposit insurance on their bank accounts has been suspended because of suspected violations of the USA Patriot Act. The emails attempt to obtain highly sensitive personal information, including bank account information, and say insurance will resume once the information is provided.

If consumers have received this or similar suspicious emails, they should report information to the FDIC at alert@fdic.gov.

For more information and to access the FDIC’s alert, click here:
http://www.fdic.gov/news/news/SpecialAlert/2004/sa0504.html.

Special Alert: Fraud and Identity Theft

Fraud and identify theft continue to be of concern to everyone. You can be the best line of defense against fraud and identity theft, and you can find additional information on the matter at www.consumer.gov/idtheft. This is the US government's central Web site for information about identity theft.

Special Alert: Fraudulent Anti-Terrorist Stop Order Letters

These letters are being sent to bank customers. Copies of these ANTI-TERRORIST letters have been received by FinCEN that notify consumers that mandatory fees, in amounts of approximately $25,000, are required for the issuance of a ANTI-TERRORIST CERTIFICATE before transactions may continue to be conducted.

These letters were NOT sent by FinCEN and represent a fraudulent attempt to elicit funds from customers. Please see FinCEN’s Website to see an example of one of these letters. Consumers should NOT provide any information nor send any funds, to any address as indicated in these letters. Further, consumers should NOT follow any instructions contained in these letters to access their accounts on-line.

Further, there are instances in which other letters are being circulated which claim that FinCEN is freezing assets and endorsing investment schemes. FinCEN does NOT have authority to freeze assets and does NOT endorse investment schemes.

FinCEN is working closely with law enforcement agencies to identify the source of these letters and disrupt these scams. Until this is accomplished, if consumers receive any letters such as these (Samples – hyperlink), or experience any similar attempts to obtain account information or funds, they are requested to notify FinCEN at webmaster@fincen.treas.gov.