Counterfeit Check Scams

One of the mostfrequent scams reported to the New Mexico Attorney General’s Office involves counterfeit checks. If you are selling goods or services you may encounter a variation of this scam.

Overpayment Scam

This scam targets individuals selling goods or services through the Internet or classified ads. In this scam the potential buyer offers to make the purchase using a check that is for more than the agreed upon price, asking you to wire the difference after depositing the check (the scam artist may even suggest you keep an additional amount “for your trouble”). Banks are required by Federal law to make funds available to you from certain types of checks (e.g., cashier’s and certified checks) at the opening of business the day after you deposit the check. The bank is making the money available for your use prior to learning the check is counterfeit. When the bank learns the check is counterfeit your bank will require you to repay them. To avoid this scam:

• Don’t accept a check for more than the agreed upon price.
• Consider using an escrow service or online payment service (but be sure to check the reliability of the service).
• Ask for checks from local banks. If that is not possible, call the bank where the check was purchased and ask if it is valid.

Secret Shopper Scam

The scam artist asks you to evaluate the effectiveness of a money transfer service. You receive a check with instructions to deposit it and withdraw cash, and then transfer the money through a specified money transfer service to another person. The original check is counterfeit and your bank will require you to repay the entire amount used.

Other variations on the Scam

The most frequent variation of this scam is a check sent to a lottery winner. The individual receiving the check did not enter a lottery and the check is counterfeit. To avoid this scam it is important to remember:

• Legitimate lotteries will not require a winner to pay anything to collect their winnings.
• You must enter a lottery to win.
• It is illegal to enter foreign lotteries by federal law.

Financial Help Scams

Many students need help paying for college. Beware of ads that offer free government grants. Chances are such ads are fraudulent. To avoid losing money to this type of scam here are some basic tips:

• Don’t give out your personal financial information to anyone you don’t know. If you provide such information to a caller you have only their word for who they are and why they want the information.
• Don’t pay money for a “free” government grant.
• Remember the agency name may seem legitimate: a successful scam doesn’t appear to be a scam.
• Just because ‘caller id’ indicates the person is calling from Washington D.C. that doesn’t mean that is really the case.

You may encounter similar scams while looking for scholarship money. Remember you do not need to pay money for a scholarship and no legitimate organization will guarantee you a scholarship. Here are some tip-offs to rip-offs:

• You are notified that you have received a scholarship or are a finalist in a contest you never entered. This type of scam will solicit money or a credit card number from you to hold the scholarship.
• You are told that the scholarship is guaranteed or your money back. You can’t get your money back from a company that likely does not exist.
• A scholarship-matching service offers you information you cannot find elsewhere. Yes you can, keep reading.

You can find scholarship information on the Internet, through your school counselor or even in a library.   Student aid information is available at www.studentaid.edu.gov.

Nigerian Scams

The “advance fee” or Nigerian scam has been around for many years.   Yet it is one of the most frequently encountered scams because it is so easy to contact millions of people through email. There are many variations on this scam but there are common elements: 

• You receive an unsolicited email from a stranger claiming to need your help to transfer millions of dollars out of their country. A complete stranger is not going to offer you 25% of $60 million to help him transfer money out of his country. 
• Another commonality is that just as “the transfer of millions of dollars” is about to take place, a “problem” develops. Your millions of dollars are in jeopardy unless you are able to send money immediately. The scam may end as soon as you send the money or they may string you along and try to obtain even more money.

The best approach is to never respond to these pleas for your assistance. If you receive an email from anyone asking for your help transferring or depositing money, simply delete the email. 

Phishing Scams

One quick and easy way for cyber thieves to steal your personal financial information is the so-called “phishing” scam. You receive an email that urgently requires a response from you. The problem occurs when you follow instructions and click on the link provided by the email. That link will take you to a “spoofed” website that will appear to be from a legitimate source but it isn’t. At the site you will be asked to enter confidential information such as a bank account number, ATM password, credit card number, or social security number.

Companies are well aware of phishing scams and they will not send you an email that asks you to verify or confirm personal or financial information. If you receive such an email and are concerned about its legitimacy, call the bank or company directly and ask them. (Be sure you find the phone number independently of any number contained in the email)

Travel Scams

You have received an offer of a fabulous, inexpensive or even free vacation. The deal may include a cruise or a fancy hotel. It’s tempting to have visions of sandy beaches and blue water racing though your mind. But hang on……..it’s not likely to be what it seems.   Remember, nothing is really “free;” look for hidden costs, fees, services or products you have to buy or something you have to invest in to get your “free” vacation. To avoid being scammed:

• Read all the fine print before you choose to take a deal on a vacation.
• Research all travel options or use a travel agent.
• Pay for your vacations with a credit card because fraudulent charges can be disputed as long as you file your complaint within the time specified by your credit card company.
• If you question the legitimacy of a travel deal, do not sign up for it.