Waring to all that sell online!

Here is one of those times where my two internet lives collide . . . I have my crafting blog and my scam education and awareness blog . . . and this topic will be posted on both of them.

I was made aware by a post on our scam fighting message board that recently several Stampin’ Up demonstrators have received emails from people wanting to purchase items and pay with a cashier’s check.  This is a scam that we have seen variations of for years on our website, and if the scammers are doing it to Stampin’ Up consultants, it is only time before they start to target other places that sell crafting items.

The scammer will request to purchase items and send a cashier’s check as payment.  If the check arrives, and it is for more than the amount of the items, the scammer will apologize for the error and ask you to deposit the check and wait for it to clear, and then wire the extra money back to them.  If the check is for the correct amount, once you have received the check and deposited it, the scammer will contact you letting you know that they need to cancel the order and will request that you return the money to them by wire transfer . . . they may even tell you to keep a portion of the money for your time and trouble.

If this situation matches one that you hear of, it is a scam.  The cashier’s check will come back as counterfeit later on and you will be held liable for the entire amount of the check.  Just because the bank has told you that the check is “good”, “clear” or “verified” does NOT mean that the money from that check is “real” and that you are safe . . . in most cases, in about a week or two, the bank will contact you and hold you liable for the money.  People have lost thousands of dollars due to these scams, and there is no way to recover this money because the scammers are in another country . . . it would have to be the law enforcement and government in that country that would have to do something about these scams.

To learn more about these and other scams, go to my website ScamVictimsUnited.com

Nigerian Cheque Fraudsters – Continued

Here is a continuation of the guest blog from our friends at Cyber Crime Ops
By James Bigglesworth


I interviewed the potential victim over a number of days during the compilation of this article. Below is part one of our interview, which covers the initial part of the scam.

CyberCrimeOps.COM: Hello Pat, thanks for coming to talk to us.

Pat: Hi James, glad to be here and thanks for allowing this story to to be told via your forum. I hope that many people will read and learn from it.

CyberCrimeOps.COM: You are quite welcome. Let’s start with some basics; Who are you and what do you d for a living?

Pat: Sure, I’m Pat [censored], forty something guy from the Manchester area of our fair land of England. I’m a Vetinary Surgeon and have a small animals practice in [censored] that has been around since my grandfathers days.

CyberCrimeOps.COM: Great, thanks for that Pat. Tell us how you came into contact with the Nigerian fraudster.

Pat: Well, our surgery isn’t doing so great, so I was in need of a quick way of earning some extra cash. I know I should not have done it, but I actually responded to a spam email in my account. It was the only one I have ever answered, and by heck the only one I ever will. I didn’t actually expect to get a reply, but I did.

CyberCrimeOps.COM: What was the original email all about?

Pat: To be honest it was a bit vague, which I suppose piqued my interest. The subject was “Program employment for all”, but the email address that it came from was curious “employment_deaf_govemployment_d@yahoo.co.jp”. The email was very short but said it was for helping unemployed people in their free time. I guess it was cheeky of me to reply, since I have a full-time job, but I was curious. That’s when this “Samuel Morcas” responded to me.

Readers may be interested to learn that the same email solicitation was received by ourselves and is posted in our Hall Of Shame forum.

CyberCrimeOps.COM: What did you find out from the reply?

Pat: Sam got back to me on the 8th June 2009, day after I first replied to him. He said that he was from New Jersey, but now in Nigeria, and that he was looking for someone to help him distribute his payroll cheques.

CyberCrimeOps.COM: Did he say how you were to do that?

Pat: Eventually, though his initial reply asked me if I have a good printer. I replied again saying I did, and basically asked him to tell me what he wanted.

CyberCrimeOps.COM: Did you get any further details when he got back to you?

Pat: Yes I sure did. Basically he wanted me to purchase some computer software which he called “verser check”, and to buy paper and ink for printing of the cheques. Then he would send me a list of people to send cheques to. I would print out the cheques at home, using the special software, and send them out to the people he gave me.

CyberCrimeOps.COM: So, why do you think he couldn’t do that himself?

Pat: Actually I never did ask him that, I just assumed that because he was in Nigeria it would take too long for the postal mail to get to the UK. If he was paying payroll, he wouldn’t want to keep people waiting for their pay too long. He did also say that he would set up a FedEx or DHL account for me to get the cheques delivered, which I guess would be very expensive to use from Africa.

CyberCrimeOps.COM: Did you start to suspect anything was wrong with the offer?

Pat: Well yes and no really. I knew that I was talking to a spammer, but I really didn’t think much about it. Looking back I was an idiot, and actually gave him my full name and postal address.

CyberCrimeOps.COM: Hindsight is a wonderful thing Pat. What happened next?

Pat: I was curious about the software he talked about so went on Google to see what I could find out. I managed to locate software called “VersaCheck” and the Ink he talked about called “VersaInk”. It was American, so I wrote back and told him that it wasn’t available for the UK.

The Ink is designated as Magnetic Ink Character Recognition which is used on cheques for compliance with US Federal and Canada Bank regulations.

CyberCrimeOps.COM: What did he say to that?

Pat: He seemed to accept it, and said he would send me the cheques in the postal mail. The last communication I had with him was on June 18th, 2009, about a week and a half after his original spam email.

CyberCrimeOps.COM: When did the cheques arrive?

Pat: Actually they didn’t arrive, and I began to forget about it.

If some unknown individual offers you some form of employment and asks you to print cheques for distribution, there is only one thing to do.


It is accepted that a business will print their own cheques for the purpose of payroll. This seems to be what these scammers are hooking into for their illegal activities. If you are recruited online to participate in such a scheme you can guarantee that it is 100% illegal.

The abuse of payroll cheque printing appears to be centered around the USA. It is also quite common for US based cheque fraud to involve charities, or at least a stolen version of their cheques. This abuse is simply down to the Federal Laws written so badly in the USA that the Banks are protected. This protection makes the Banks act like gods, and the attitudes mean that victims of crime get the blame for what is in reality failure by the banks to protect their own customers.

I find that banks in the USA always blame the customer, and never accept any responsibility for a bad system. They won’t fix it, because they are protected by Federal law, so why should they. Changing the law is the only way to change the lax and hugely arrogant banking attitudes, and we all know how quickly that is going to happen.

References and Further Reading
Hall Of Shame – Program employment for all
Wikipedia – Curiosity Killed The Cat
Wikipedia – Magnetic Ink Character Recognition

Related CyberCrimeOps.COM Articles
Cheque Fraud – The Unseen Victims
Overpayment Scams
Payment Cashing – A Mule Of A Fraud
Secret and Mystery Shopping With A Twist
Seller Beware – Are You Really Getting Paid?
You Have Won A Lottery/Sweepstake – Or Have You?

Counterfeit Cashier’s Checks and MoneyGram

I am currently working with a lawyer who is interested in speaking to victims of counterfeit cashier’s check scams who wired money using MoneyGram.  Please contact me if you would be willing to speak with this lawyer.  If this turns into a case, it could be a huge break for victims of these scams.

Do not post your contact info here . . . if you do not already have my contact information, you can find me through http://www.retaggr.com/page/ShawnMosch

Scam fighting – 2010

As 2009 comes to a close and we enter into 2010 I wanted to share the New Year’s Resolution that we have at Scam Victims United . . . to bring scam education and awareness to people across the country.

One of the ways that we plan to do this is with events called Scam Jam. These events are the brainchild of Chuck Whitlock an investigative reporter, author and speaker. If you have ever been to a Home and Garden Show or Wedding Expo, imagine that same experience and setting focusing on scams and fraud. There are presentations, workshops and speakers on various topics such as

ID Theft
Internet Scams
Investment Fraud
Health Care Scams
Bank Fraud
Elder Fraud
Charity Scams
Mortgage Fraud
Phishing Scams
Credit Card and Check Schemes
Contractor Fraud
Food/Supplement Fraud
Mail Fraud

Presenters include local media personalities sharing their best investigative reporting stories that expose scams, law enforcement groups, lawyers and legal experts, and even former scam victims sharing their story of victimization to recovery. Beyond the workshops and presentations, people attending a Scam Jam can interact with Consumer Protection groups in the Exhibitors Room. These professionals can assist them with their scam and fraud related questions, and offer then resources to assist them recovery efforts. You may even be able to purchase one of Chuck Whitlock’s investigative books that exposes scams or books by other presenters.

Scam Jam is a one stop shop for education and resources on scams, fraud and consumer protection.

We are currently scheduling dates for Scam Jam events for 2010. If your school, business or company would like to host a Scam Jam at your facility, or if you are a professional in the area of scam fighting and consumer protection that would like to be a part of a Scam Jam in your area, please contact us.

Shawn Mosch
Co-Founder of ScamVictimsUnited.com
There is strength in numbers!

Find us on Twitter, Facebook and more through

Support Scam Victims United by shopping at

Detecting counterfeit checks

In my searching around on the internet for information on scams, stories of scams in the news I came across a story at http://www.americanbanker.com/btn_issues/22_3/-374033-1.html written by Mike Fenton of Parascript. In the article he says

Automatic systems for signature verification can successfully rely on a shared image archive and improve customer service and satisfaction by enabling banks and retailers to proactively inform customers of potential fraud. Similarly, check stock verification software can be used in a shared image archive environment to protect financial institutions against the fastest-growing source of fraudulent activity surrounding checks today, responsible for 28 percent of all check-related losses in banks – counterfeit checks.

What I want to know is if this works just for personal checks, or if this system also works for counterfeit cashier’s checks.

Here is some information from their site.

Parascript Expands Fraud Detection Capabilities with Check Stock Verification Software
Boulder, CO – May 18, 2004– Parascript, LLC, an industry leader in recognition software, announced today the release of CheckStockXpert™, an anti-fraud software used to detect counterfeit checks. This new software complements Parascript’s check recognition and signature verification products to give banks and financial institutions a powerful defense against multiple types of fraud.

The American Bankers Association reports that attempted check fraud in banks nationwide surpassed $4.3 billion in 2002, and continues to be a major concern as criminals gain access to more sophisticated equipment and develop new tactics to attack institutions with weak defenses. This newest addition to Parascript’s anti-fraud product suite will help banks and financial institutions automatically detect suspect checks passing through the system. The full suite of products will address altered and counterfeit checks as well as random and skilled forgery.

“Parascript is committed to applying our advanced pattern recognition technology to all facets of the growing problem of check fraud,” said Mike Fenton, Parascript’s vice president of Total Recognition Solutions. “First with CheckPlus® andSignatureXpert®, and now with CheckStockXpert, Parascript is setting the pace for enhancing and streamlining fraud detection. As we have in the past, we will continue to advance our technology to combat any and all fraudulent activity against financial institutions, retailers and their customers.”

CheckStockXpert uses advanced pattern recognition to verify the full image of a check as well as preprinted objects on a check including headers of check number, date, payee, dollar amount, dollar sign, memo, payor block and payor bank field. This software scrutinizes the placement of each item and its relative distances between pairs of blocks, allowing banks to immediately identify even the slightest variations of a check. Multiplemethods of verification—including quantitative analysis, pattern recognition, analytical and geometrical analysis and neural networks—further increase accuracy. Asa result, banks and financial institutions can automatically detect copies or imitations of checks passing through the system.

Parascript’s three-pronged defense puts a stop to even the most sophisticated check-writing criminals.

CheckPlus, Parascript’s hallmark check recognition software, already used by leading financial institutions captures multiple fields on a check, including payee line, check number, dollar amount and date. Having this key information helps enhance positive pay or other fraud detection applications. Parascript’s signature verification software, SignatureXpert, uses the most advanced pattern recognition technology to detect random and skilled signature forgery. These two software products combined with CheckStockXpert help banks and financial institutions build a solid defense against all types of fraud.

Parascript’s suite of anti-fraud products is immediately available. More information is available at http://www.parascript.com.

About Parascript, LLC

Parascript’s Total Recognition® technology converts paper-based information into computer-usable data. It is the first complete technology that recognizes all character types — cursive, handprint and machine print — on all forms. Its unique capabilities allow organizations using forms to capture customer information to dramatically reduce their data entry expenses. With Total Recognition technology, companies can turn handwritten and print data, including legacy data, into electronic information that can be used to power web-based offerings and other marketing initiatives. Total Recognition technology is available via a number of channels: as software development kits, through Parascript’s on-line services, through onsite custom solutions, and from Parascript’s partners.

Great article on counterfeit cashier’s checks

I wanted to share an article I found on the dangers of counterfeit cashier’s checks with you. Not only does this article contain a lot of great information, but it mentions our site, Scam Victims United.


This article was originally published by MSN Money, on Friday, Dec. 11, 2009.

Did you get conned into joining a check-cashing scam? Even if authorities decide you’re an innocent victim, you could find yourself owing a bank thousands of dollars.

By Katherine Reynolds Lewis

Cash a check, go to jail. Or at the very least, empty your own savings account and ruin your credit.

It’s happened to hundreds of thousands of Americans who believed that banks don’t make funds available unless the checks they’ve deposited are genuine.

It happened to Calvin Barnett, who could face 11 years in prison for doing what he said he thought was his work-at-home job.

As unemployment reaches its worst levels in generations, scammers are finding a growing pool of victims all too willing to deposit strangers’ checks, then return part of the money by wire transfers.

“There’s a knowledge gap that these scammers are clearly taking advantage of,” said Susan Grant, the director of consumer protection for the Consumer Federation of America. “Under federal law here in the U.S., financial institutions have to give consumers access to the money from checks and money orders they deposit pretty quickly, usually within one to five business days. It can take much longer for counterfeits to be discovered, by which time the consumer has already sent the money.”

“The problem is the con men are very persuasive,” said Nessa Feddis, a vice president and senior counsel at the American Bankers Association, which is working with the Consumer Federation to educate consumers about check fraud. “People are desperate. They want to work. They want a job.”

How the scams operate

Fake-check scams lurk under a number of disguises, but they share a common framework that depends on:

A U.S. law that requires banks to make funds available to depositors in five business days or less — more quickly than the bank typically can verify the check is genuine.
Willing victims.

A fake check — often drawn on a real account but printed in some scammer’s basement — may arrive as part of a work-at-home job offer or a sales transaction that feels like the answer to a desperate prayer. The scam artist will instruct you to cash the check, keep a percentage and wire the balance to a designated account.

A Consumer Federation study found that 1.3 million Americans have fallen for fake-check scams, losing an average of $3,000 to $4,000 per victim. Fake-check scams are the No. 1 fraud reported to the National Consumers League. The American Bankers Association estimates that bank losses from counterfeit checks totaled $307 million in 2008, up from $252 million in 2006. More than half of the banks surveyed this year expect losses due to phony checks to rise in the next 12 months, Feddis said.

Why you’re on the hook

When the counterfeit is discovered, you — the person who deposited it — are responsible for paying back the money. After all, the bank gave you the cash, and you chose to wire it to the scam artists. It’s illegal for the bank to deny you access to the funds, even if a teller suspects the check may be phony.

“It’s a balance between giving people access to their money and preventing fraud,” Feddis said. “The consumer is in the best position to know that they should be suspicious. . . . The bottom line is, why are they asking you to wire money when they’re sending you a check?”

In the Consumer Federation survey, 59% of people wrongly believed that the financial institution confirms a check is good before allowing you access to the money.

The most common consequences

If you fall for a check-fraud scam, when the bank discovers the counterfeit checks it will deduct that amount from your account or freeze your account if there aren’t sufficient funds.

That’s what happened to Harry Smith, 25, of Union City, N.J. Smith answered a Craigslist ad for a paper company purportedly based in England that claimed to need a U.S.-based worker to expedite order processing. He cashed three checks totaling $6,000, kept 10% and wired the balance to the “production managers.”

“I figured if whatever check I did have wasn’t good, it wouldn’t go through at the bank,” Smith said. “I had constant communication with this other person, so I felt there wasn’t anything wrong.”

But when he called the return phone number on the FedEx package containing the checks, the person who answered had no knowledge of Smith’s supposed employer. He went to the bank and had to wait more than a week to confirm they were counterfeits. If he didn’t repay the bank the $6,000, he would be reported to ChexSystems and wouldn’t be able to open a U.S. bank account for at least five years.

“Luckily I opened another one before it got reported,” he said. Now the $6,000 has been turned over to a collection agency, and “I pay about $250 a month for two years to pay it off.”

When you become a criminal

Cashing a fake check becomes a criminal act when you are aware of the counterfeit. Typically, banks won’t press charges unless it’s clear you knew about the scam, Feddis said.

But just because you know you’re innocent doesn’t mean that law enforcement will see it the same way.

Earl Walls of Huntington, W.Va., 68, had never been in trouble with the law before he deposited phony checks and wired $3,000 to scam artists. After his arrest, the bank froze his account; he couldn’t even pay a retainer to a lawyer. According to county rules, his income from Social Security was high enough that he didn’t qualify for a public defender, but the bank wouldn’t let him withdraw from his account.

“I had no money,” said Walls, retired from a job as a supervisor in a corrugated-box factory. “I had to get out and borrow money from friends and relations to make a house payment.”

Fortunately, his neighbor contacted the West Virginia Attorney General’s Office, which recognized that Walls was a victim rather than a criminal, said Derek Walker, the chief investigator for the attorney general.

“He received instructions from this ’employer,’ and he followed the instructions to the letter,” Walker said. “His story checked out.”

After state officials talked to the county prosecutors, Walls received a pro bono public defender, and all charges were dropped. But to this day he feels anxious when he sees a police car or even a FedEx truck — like the one that brought the counterfeit checks to his door — in his neighborhood.

Innocent or guilty?

Calvin Barnett wasn’t as lucky. For two years he’s been awaiting trial for cashing a $3,000 counterfeit check he received after answering a Craigslist ad for a payment processor job.

“I haven’t told my family,” said Barnett, 30, who had moved to New York City from Alabama in 2007 to seek work. “I was just embarrassed that I could be so stupid.”

The police were suspicious because he received the check at a post office box and cashed it at a bank where he wasn’t a customer, said his attorney, Damien Brown. A spokeswoman for the New York District Attorney’s Office declined to comment on Barnett’s case.

Barnett is free on bail but has had trouble finding work due to the criminal indictment against him. “My life is in abeyance,” he said.

How to spot the scam

The best way to avoid being scammed is never to wire money to someone you haven’t known for a long time, Walker said. Even then, confirm that the person you’re sending money to actually is the relative or friend you want to help.

One West Virginia resident received an urgent call asking “Grandma” for help. She blurted out her grandson’s name, and the caller said, yes, that was him. But after she wired the money, it turned out that her grandson was fine. She’d just been scammed, Walker said. (See “Beware fake grandkids calling for cash.”)

Other tips include:
Never pay money in order to claim a prize. No legitimate lottery or sweepstakes will ask you to send money in advance before receiving your winnings. If you were actually a winner, you’d pay any taxes directly to the government after getting your prize.
Never pay for grants from foundations or the government. Genuine grants — which mostly go to organizations — don’t charge for money and have lengthy application processes.
Never send money to anyone who asks you to cash a check or money order, whether in connection with the sale of an item, a work-from-home job or an Internet romance.
Never wire money to someone unless you have met him or her in person and have known each other for a long time.
To learn more about scams, contact the Consumer Federation of America, the Federal Trade Commission, Fraud.org and FakeChecks.org of the National Consumers League, Scam Victims United and Fraud Aid

MoneyGram and FTC

This information can be found at


MoneyGram International, Inc., the second-largest money transfer service in the United States, will pay $18 million in consumer redress to settle FTC charges that the company allowed its money transfer system to be used by fraudulent telemarketers to bilk U.S. consumers out of tens of millions of dollars. MoneyGram also will be required to implement a comprehensive anti-fraud and agent-monitoring program.

The FTC charged that between 2004 and 2008, MoneyGram agents helped fraudulent telemarketers and other con artists who tricked U.S. consumers into wiring more than $84 million within the United States and to Canada – after these consumers were falsely told they had won a lottery, were hired for a secret shopper program, or were guaranteed loans. The $84 million in losses is based on consumer complaints to MoneyGram – actual consumer losses likely are much higher.

The FTC charged that MoneyGram knew that its system was being used to defraud people but did very little about it, and that in some cases its agents in Canada actually participated in these schemes. According to the FTC’s complaint, MoneyGram knew, or avoided knowing, that about 131 of its more than 1,200 agents accounted for more than 95 percent of the fraud complaints it received in 2008 regarding money transfers to Canada; a similarly small number of agents was responsible for more than 96 percent of all fraud complaints to the company in 2006.

“Money transfer services have a responsibility to make sure their systems don’t become conduits to rip people off,” said David C. Vladeck, Director of the FTC’s Bureau of Consumer Protection. “In this case, MoneyGram not only ducked this responsibility, but also looked the other way while its agents took part in the scams.”

Minneapolis, Minnesota-based MoneyGram operates through a worldwide network of approximately 180,000 agent locations in 190 countries and territories. In its complaint, the FTC charged that in recent years this network has increasingly been used by telemarketing scammers to prey on U.S. consumers. Con artists prefer to use money transfer services because they can pick up transferred money immediately, the payments are often untraceable, and victimized consumers have no chargeback rights or other recourse.

In 2007, 72 percent of all complaints received by the FTC involving Canadian-based fraud reported using money transfer services to make payments. According to a recent FTC survey cited in the complaint, at least 79 percent of all MoneyGram transfers of $1,000 or more from the United States to Canada over a four-month period in 2007 were fraud-induced. The Commission’s complaint further stated that based on the more than 20,600 fraud complaints MoneyGram itself received, U.S. consumers lost more than $44 million to cross-border money-transfer frauds between 2004 and 2008 alone. When combined with losses reported by U.S. consumers on money transfers within the United States, that number grows to $84 million.

In many of the scams that used MoneyGram’s money transfer system, the con artists used counterfeit checks to induce consumers to send money back by wire transfer. The most prevalent of these scams were lottery or prize schemes in which consumers were told they had won thousands of dollars and just had to pay a fee for “taxes,” “customs,” or “insurance” to a third-party to collect their winnings. Consumers paid the fee using MoneyGram, but received nothing. In another scheme, telemarketers told consumers they were guaranteed loans, regardless of their credit score. All they had to do was pay “insurance,” “paperwork,” or “processing” fees to complete the transaction. Consumers who sent funds using a money transfer service got nothing in return.

In mystery shopping scams, the con artists called U.S. consumers or sent them a piece of direct mail in which they claimed to be hiring consumers to visit stores such as Wal-Mart to evaluate MoneyGram money transfer operations. The con artists sent consumers a cashier’s check, telling them to deposit it in their checking account and then send most of the money back using a money transfer at Wal-Mart. When the counterfeit checks bounced, consumers realized they had lost the money they transferred. By this time, however, the money transfer agents had already received and paid out the money, often either without checking IDs or by using fake drivers license information.

The FTC’s complaint alleges that MoneyGram ignored warnings from law enforcement officials and even its own employees that widespread fraud was being conducted over its network, claiming that proposals to deal with the problem were too costly and were not the company’s responsibility. The company even discouraged its employees from enforcing its own fraud prevention policies or taking action against suspicious or corrupt agents. Some employees who raised concerns were disciplined or fired, the FTC charged.

In addition, at least 65 of MoneyGram’s Canadian agents have been charged by Canadian or U.S. law enforcers with, or are currently being investigated for, colluding in fraud schemes that used the MoneyGram system.

The complaint charges MoneyGram with violating both the FTC Act and the FTC’s Telemarketing Sales Rule by helping sellers or telemarketers who it knew – or consciously avoided knowing – were violating federal law, and for not taking adequate steps to prevent fraud.

The agreed-upon court order settling the FTC’s charges bars MoneyGram from knowingly providing substantial help or support to any sellers or telemarketers that are violating the Telemarketing Sales Rule and requires it to implement a comprehensive anti-fraud program. Under the anti-fraud program, MoneyGram must conduct background checks on prospective agents; educate and train its employees about consumer fraud; institute agent monitoring; and discipline agents who don’t comply with the rules. The order also requires MoneyGram to provide a clear and conspicuous fraud warning on the front of all its money transfer forms. The order’s conduct provisions apply to all MoneyGram money transfers sent worldwide from either the United States or Canada.

The order contains monitoring and discipline provisions that will ensure MoneyGram is properly training, monitoring, and taking actions to address problems related to its agents. To do this, the order requires MoneyGram to develop and maintain a system for receiving consumer complaints and data, and to provide that information to the FTC upon request. MoneyGram also must take all reasonable steps to identify agents that are involved in fraud. It must review its transaction data to identify any unusual or suspicious activity by its agents and fire any agent who it believes may be participating in fraudulent activities. It also must fire or suspend any agent who has not taken appropriate steps to stop fraudulent money transfers.

Finally, MoneyGram will pay the Commission $18 million, which will be used to provide redress to consumer