Hackers and Fraudsters and Scammers . . . Oh My!

When I think of financial scams, the first thing that comes to mind is that episode of “the Office” where Michael tries to sign everyone up for a pyramid scheme.

michael scott

Oscar: This sounds like a get rich quick scheme.
Michael: Yes! Thank you! You will get rich quick. We all will!
Toby: Didn’t you lose a lot of money on that other investment, the one from the email?
Michael: You know what, Toby? When the son of the deposed king of Nigeria emails you directly, asking for help, you help! His father ran the freaking country, okay?
– The Office, Season 2, Episode 19, “Michael’s Birthday”

While Michael probably should have spotted his “business opportunity” as a scam, financial fraudsters today aren’t always so easy to recognize. They use well-known websites, send checks that look authentic, and are really, really good at tricking you into giving them your money. You might be doing something a routine as answering a phone call from what you think is your credit union or selling an old laptop online and the next thing you know your bank account has been hacked.  Scammers rely on the fact that you feel safe giving out your info or doing your business online.  If you are totally oblivious to potential scams, you’re the perfect target! Although I don’t expect you all to turn into crime-fighting, fraud-preventing superheroes (get out your capes and tights!), knowing the warning signs of a potential scam can save you some major bucks and a lot of hassle.
Here’s a quick overview of a few of the more common check scams out there:
Phishing – Someone calls or e-mails you posing as a familiar bank, retailer, or government agency. They say that something is wrong with your account and ask you to give them personal or financial information in order to fix the problem. A legitimate business would never contact you unexpectedly to request this kind of information; these types of calls are likely scammers trying to get access to info like your bank account number, Social Security number, passwords, etc. If you get a call or e-mail like this that you suspect is a scam, end the interaction right away, don’t give them any info, and contact the business you thought you were dealing with directly.
**Example: “Rachel from the credit card company” calls my parent’s house all the time saying that she can help them lower their interest rate if they just confirm some of their information. The fact that she doesn’t specify which credit card company should tip you off right away that it’s a scam. If your credit card company did want to lower your interest rate (which is rare), they would identify themselves.
Overpayments – Let’s say you sell an item online and the buyer sends you a check or money order for more than the amount you agreed on. They claim that the overpayment is a mistake and that you can just send them the extra money back. Or they say the check came from someone else who owed them money. They want you to take what you need and forward the remaining amount to them along with the item they purchased. Whatever explanation they give, it’s a scam! Legitimate buyers would agree to send you a check for the correct amount. Accepting an overpayment can leave you without your item and without the cash!
Rental Schemes – This is a trick that I had never heard of until I checked out www.fakechecks.org. It’s super sneaky! In this scheme you put an ad for a rental apartment or house online. A potential tenant, typically from outside the area, contacts you about renting the place. They send you a check or money order for more than the agreed upon rent and ask you to use the extra money to pay for the cost of shipping their stuff, getting their rental car, or some other expense. They could just send the money directly to this third party, but they ask you do to it for them instead. DON’T DO IT! The check is probably fraudulent and I’m willing to bet that they are on the receiving end of that “shipping” company you sent money to. You probably won’t see them in your apartment any time soon.
Work-From-Home Offers – We’ve all seen the ads: “Work from home! Make $8,000 a day for 4 hours of work! Live the life you’ve always wanted!” Admit it – there’s a small part of you that’s tempted to click on those links and see if they’re legit. Because who wouldn’t want to make a lot of money and not be stuck at the office for 40 hours a week? You know what they say though, if it seems too good to be true, it probably is! Scammers will contact you via e-mail, social media, or phone offering to hire you without an in-person interview or background check. They may ask you to deposit checks made out to the business into your personal account and tell you to keep a portion of it as your pay. Or they might send you funds to “test” a money transfer service for them. Whatever the set-up is, remember that legitimate businesses would pay you the old-fashioned way, with a paycheck and tax deductions.
Sudden Riches – Surprisingly, there are not a lot of people out there just dying to give you buckets of cash for no good reason. In a perfect world we would all be millionaires without having to lift a finger; but in the real world, it is highly unlikely that a sudden windfall of riches will come your way. One common check scam is to notify people that they have won a sweepstakes. They send you an “advance” on your winnings to help you pay for legal expenses or taxes. Or they say that in order to claim your winnings you first need to send them a check for a small amount so that they have your account information. A legitimate sweepstakes would never ask you to send them money before they sent you your winnings. Taxes and any other expenses would be deducted from money you won in a legitimate contest before they sent it to you. Additionally, notice of these winnings always comes by certified mail, not by regular mail, phone, or e-mail.
**Warning Sign: If you didn’t buy a lottery ticket or enter yourself in a sweepstakes, you probably didn’t win one! If anyone contacts you about winning a contest you didn’t enter (especially one in a foreign country you’ve never been to), it’s probably a scam!
Love Losses – This scam is the last and, in my opinion, saddest one on my list. This is the financial version of Catfish (a great documentary about a guy who thought he was dating a hot, young girl online and it was really a middle-aged woman – you should watch it!). Here’s how it happens: you start chatting with someone online, maybe through a well-known social media or dating site. The person claims to live far away from you, out of state or even in another country, so it would be difficult for you to meet in person. Once you’ve spent a lot of time getting to know each other and have built a relationship, they ask you to send them money. It might be for a medical emergency, to help someone in their family, or to travel to visit you. Whatever the reason, they need you to send them money ASAP. You should never send money to someone you haven’t meet in person. No matter how much you may trust or feel connected to this person, you run the huge risk that they aren’t who they claim to be.
So now that you’ve read through all of them (hopefully 😉 ) what are you supposed to do to avoid all of these potentially dangerous situations? Hide in your room? Go off the grid? The answer is simple – just be on the look-out. You don’t have to become overly suspicious of everyone you do business with, but be aware that fraudsters are out there and that they are always looking for new victims. Here are a few key things to keep in mind:
1. If you deposit a bad check or money order into your personal account, YOU are responsible for the funds. If a bad check overdraws your account, you have to come up with the money to cover the negative balance. Once you sign a check and deposit it, the issuing party is no longer responsible for the funds, even if the check is bad. If you’re unsure about a check, don’t deposit it!
2. Just because a check cleared your account, does not mean that it was good! It can take a long time for checks to be declared fraudulent (sometimes up to a few months). Federal law requires your financial institution to make funds available to you quickly, usually within 10 days, meaning that you could withdraw the money from a check deposit before finding out if it is bad. So again, if you’re not sure about a check, don’t risk depositing it.
3. Never accept an overpayment. A legitimate buyer or employer will always agree to send you a check for the correct amount. There is never any genuine reason that someone would need you to accept a check for a higher amount and return excess funds to them.
4. Never give your personal information to a person or business over the phone or online that you did not contact directly.
5. Never send money to someone you have not met in person. Similarly, never agree to cash a check or money order for someone you do not know.

If you want more information about check scams and how to avoid them, visit www.fakechecks.org. They have lots of great videos that help you understand exactly how these types of schemes work as well as a link to site where you can report suspected fraudulent activity. If you ever have questions about a potentially fraudulent check or a financial situation that seem suspicious, contact your credit union or bank right away; they help you decide how best to proceed.

Hopefully, you if you are aware of potential scams and are cautious about who you give personal information to you won’t end up like Michael Scott.



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