Money Transfers

http://www.ftc.gov/bcp/edu/pubs/consumer/alerts/alt034.shtm

Money Transfers Can Be Risky Business

You’ve won a prize!
I’m in a foreign country, and I need cash.
We’re temporarily unable to accept credit cards.
Your dream apartment is available immediately at an incredible price!

Scam artists use a number of elaborate schemes to get your money, and many involve money transfers through companies like Western Union and MoneyGram. According to the Federal Trade Commission (FTC), the nation’s consumer protection agency, money transfers may be useful when you want to send funds to someone you know and trust — but they’re completely inappropriate when you’re dealing with a stranger.

Why do scammers pressure people to use money transfers? So they can get their hands on the money before their victims realize they’ve been cheated. Typically, there is no way you can reverse the transaction or trace the money. Another reason: When you wire money to another country, the recipient can pick it up at multiple locations, making it nearly impossible to identify them or track them down. In some cases, the receiving agents of the money transfer company might be complicit in the fraud. Money transfers are virtually the same as sending cash — there are no protections for the sender.

Many money transfer scams involve dramatic or convincing stories that play on your optimistic nature, your altruism or your thriftiness. But no matter how you parse it, they always cost you money. Here are some scams involving money transfers that you may recognize:

Counterfeit Check Scams

Someone sends you a check with instructions to deposit it and wire some or all the money back. By law, banks must make the funds from deposited checks available within days, but uncovering a fake check can take weeks. You are responsible for the checks you deposit, so if a check turns out to be fraudulent, you will owe the bank any money you withdrew.

Counterfeit check scams have many variations:

Lotteries and Sweepstakes: You just won a foreign lottery! The letter says so, and a cashier’s check is included. All you have to do is deposit the check and wire money to pay for taxes and fees. Oops: The check is no good. Although it looks like a legitimate cashier’s check, the bank eventually will determine that it is a fake. The lottery angle is a trick to get you to wire money to someone you don’t know. If you deposit the check and wire the money, the check will bounce — and you’ll be responsible for the money you sent.

Overpayment Scams: Someone responds to your posting or ad, and offers to use a cashier’s check, personal check or corporate check to pay for the item you’re selling. At the last minute, the so-called buyer (or the buyer’s “agent”) comes up with a reason to write the check for more than the purchase price, and asks you to wire back the difference. The checks are counterfeit, but very often, good enough to fool bank tellers. Acting in good faith, you deposit the check and wire the funds back to the “buyers.” Oops: the check bounces. You are liable for the amount you wired.

Mystery Shopper Scams: You are hired to be a mystery shopper and asked to evaluate the customer service of a money transfer company. You’re given a check to deposit in your personal bank account. Then, you’re told to withdraw the amount in cash and wire the money using a certain money transfer service. Often, the instructions say to send the transfer to a person in Canada or another foreign country. You’re then asked to evaluate your experience — but no one collects the evaluation. Oops: the check you deposited bounces. You are responsible for the money you withdrew.

Don’t wire money to:

  • a stranger — in this country or anywhere else
  • someone claiming to be a relative in a crisis — and who wants to keep their request for money a secret
  • someone who says a money transfer is the only form of payment that’s acceptable
  • someone who asks you to deposit a check and send some of the money back

Other Money Transfer Scams

Online Purchase Scams: If you are buying something online and the seller insists on a money transfer as the only form of payment, consider it a red flag: ask to use a credit card, an escrow service or another way to pay. No matter what story the seller tells you, insisting on a money transfer is a signal that you won’t get the item — or your money back. Find another seller.

Advance Fee Loans: Ads and websites that guarantee loans or credit cards regardless of your credit history may be tempting. The oops moment is when you apply for the loan or credit card and find out you have to pay a fee in advance. If you have to wire money for the promise of a loan or credit card, it’s likely you’re dealing with a scam artist.

Family Emergency Scams: You get a call out of the blue from someone who claims to be a member of your family and needs cash to get out of a jam — to fix a car, get out of jail or leave a foreign country. He begs you to wire money right away and to keep the request confidential. Check it out with your family. It’s likely they know nothing about it. If you absolutely, positively cannot ignore the request, try to verify the caller’s identity by asking very personal questions a stranger couldn’t possibly answer. And keep trying to reach the family to check out the story.

Apartment Rental Scams: Some scammers hijack bona fide rental or real estate listings by changing the email address or other contact information, and placing the altered ads on other sites. Other rip-off artists make up listings for places that aren’t for rent or don’t exist, and try to pique your interest with the promise of below-market rent. But once they have your attention, a skilled scammer asks you to wire an application fee, a security deposit or the first month’s rent. It’s never a good idea to send money to someone you’ve never met for an apartment you haven’t seen. If you can’t meet in person, see the apartment or sign a lease before you pay, keep looking.

If you’ve wired money to a scam artist, call the money transfer company immediately to report the fraud and file a complaint. You can reach the complaint department of MoneyGram at 1-800-MONEYGRAM (1-800-666-3947) or Western Union at 1-800-448-1492. Ask for the money transfer to be reversed. It’s unlikely to happen, but it’s important to ask. Then, file a complaint with the FTC. Visit ftc.gov or call toll-free, 1-877-FTC-HELP (1-877-382-4357); TTY: 1-866-653-4261.

The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid them. To file a complaint or to get free information on consumer issues, visit ftc.govor call toll-free, 1-877-FTC-HELP (1-877-382-4357); TTY: 1-866-653-4261. The FTC enters consumer complaints into the Consumer Sentinel Network, a secure online database and investigative tool used by hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.

MoneyGram class action

Last week I wrote about MoneyGram and the FTC, and how the FTC has found that MoneyGram knew that it’s money transfer system was being used to defraud and scam people out of their money, and did very little about it.

Since then I have been contacted by a consumer rights attorney in California and he would like to bring a claim against MoneyGram to get money back to scammed consumers.

If you know of anyone in California that was scammed by MoneyGram, please have them contact me so that I can get them in touch with this attorney. He is willing to help the victims and work on contingency.

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

Find us on Twitter, Facebook and more through
http://www.retaggr.com/page/ShawnMosch

Support Scam Victims United by shopping at
http://shopittous.blogspot.com/

MoneyGram and FTC

This information can be found at

http://www.ftc.gov/opa/2009/10/moneygram.shtm

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

Another scam victim arrested

A while back I told you about a scam victim who was arrested. Stories like these always frustrate me because as a former scam victim I know the hurt and pain that you go through when you find out that you have been scammed, but these victims have that feeling plus more because they now have been arrested. They do not just face the financial recovery process that people like myself went through, but they also have to hire a lawyer to prove that they are the victim in the case and not the criminal. What happened to innocent until proven guilty?

This victim was also responding to a Secret Shopper ad.

Here is the story of this latest scam victim in her own words . . .

I responded with all the requested information the next day. Shortly after I responded to this email I was asked by a local company to come into their office for an interview. I did and became very hopeful that I would get the job. I totally forgot about even responding to the Mystery Shopper email and wasn’t really expecting to hear anything from them. I few days later I received 2 Money Gram money orders @ $998.00 each sent to me via Fed Ex overnight mail. No other documents were inside. I couldn’t figure out where these came from and was not even thinking about that one email response I sent for the Mystery Shopper position. I had read an email in my AOL inbox a week or two before that I was a part of a class action lawsuit against AOL for some “footer” issue. I assumed these checks may have been a result of the class action suit since I had 2 screen names with AOL. I attempted to call Money Gram and went online and could not get any information regarding the tracking numbers on them. NO ONE EVER EVEN MENTIONED POSSIBLE FRAUD. When I went to the Money Gram station at the local Lucky store (in the town I have lived for 34 years and am now raising my 13 year old son) to cash these money orders I was arrested immediately. I was frisked, my car searched my purse emptied all in front of the Lucky store here in the quaint little community where most people know everyone. The 3 responding officers were absolutely sure that I was some check fraud “ring leader!” They would ask me where the money orders came from, I would answer telling them that they were sent via UPS next day air but I was unsure by who. Then I was told to shut up and stop lying. One officer told me “you and I both know no one sent these to you. You made these yourself” I was then “escorted” to Alameda County Jail where I remained for the next 10 hours until my $10,000.00 bail bond (for check fraud) was processed.

Once released from jail I made it my mission to catch this dirty rotten scum bag who was responsible for what I had been through. So…..I responded to an email that he had sent to me (which I didn’t even open until about 2 days after I was released from jail) indicating that he sent the package and instructions and he needs me to follow through with this task immediately (of sending his payment via Western Union) I played along with this guy to try to obtain as much information as I could. I advised him that the money orders were cashed and to please call me as I was a bit confused about something regarding his instructions. He called, about every other minute from that moment through the next 4 days. Once even forgetting to *67 therefore I was able to obtain his NIGERIAN telephone number. He even went so far as to send me text messages!!! He thought I had his money and he wanted it. I recorded our phone conversation on my MAC I MOVIE. I tracked down the gentleman whose email address they had hacked and were using to send the initial correspondence. He lived in S. Africa and was the administrator of a fishing forum. I explained to him my situation and advised him to contact the FBI before they contacted him as I had already given them his email information on my FBI report of this incident. He was grateful that I had taken so much of my time to track him down and explain this situation to him so that he could cancel his email address they were using before they had sent any further damaging money orders out to innocent people. I thought that since the local police didn’t really care about catching these losers that I would!!

I have since retained a very good lawyer. We have met with the DA who still is unsure whether he plans to file charges against me or not. I appeared in court last week and at that time there were no charges filed yet BUT THE CASE WAS NOT DROPPED EITHER!!! I go back to court November 5th.

Ever since this happened I cannot STOP talking about it. It helps for me to get past the anger. Initially, I was consumed by researching scammers, trying to catch this guy and others like him. Then I realized that law enforcement officials are inexperienced and unequipped to handle situations like mine. They are not interested in catching the people responsible and therefore I needed to direct my ager somewhere else and for that reason, I would love to tell my story in hopes to make people aware of these scammers.

Seven years

Seven years ago this month my husband and I became victims of a counterfeit cashier’s check scam while selling his 1961 Buick Special online. So much has happened in those seven years.

We found that we were not alone, and that this was happening to others.
We started our website Scam Victims United to share our story with others.
We spoke out in the news about this issue.
We have worked with Consumer Protection Agencies to help spread the word about scams.
In the first two years of our site being operational, we helped to stop over 2 million dollars from going into the hands of scammers.

We have come a long way, but we still have so far to go. The Consumer Federation of America released the results of a survey in May 2009 which relates directly to information we at Scam Victims United work to educate people about. They found that fifty-nine percent of the respondents incorrectly believe that when you deposit a check or money order, your bank confirms that it is good before allowing you to withdraw the money. The number goes up to 70 percent among young adults age 18-24, and 71 percent of people with incomes under $25,000 and who did not complete high school. More than 40 percent of those surveyed do not know that they are liable if the checks or money orders they deposit or cash are counterfeit. Fifty-two percent age 18-24 and half of Hispanics incorrectly said the person who gave you the check must pay the bank back. This is precisely the type of information that we at Scam Victims United work to educate people about.

As you can see by the results of this survey, there is a great need for education in the area of banking terminology and the check clearing process. One of the major reasons that counterfeit cashier’s checkscams work so well is that when a bank customer hears the terms “the check is clear” or that it will be “verified in 24 hours” it gives them a false sense of security that the check is legitimate and that they can use the money with no repercussions.

And that is our mission.

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

Find us on Twitter, Facebook and more through
http://www.retaggr.com/page/ShawnMosch

Why do scammers love Craigslist?

Many websites have become infested with scammers, but Craigslist seems to be one of the places that the scammers really love to hang out. Why is that?

Variety of categories – In the past, when a scammer wanted to find a victim for their overpayment scams they had to go to a website were people were selling items, usually of large value. If they wanted to find a victim for an employment scam, they had to go to a site where people were posting their resumes. If they wanted to find a victim for a romance or dating scam, they would have to go to a dating website. If you wanted to find a victim for renter or roommate scam, you had to go to a site where people were posting housing information. With Craigslist, you can find all of those people in the different categories on the same site.

Includes the entire country – There are other classified ad sites that would have the same variety of categories that Craigslist has, but they are usually for a certain geographic location. If the scammer wants to try and find more victims, they would have to go to another classified ad site that is targeted towards another geographic location. With Craigslist all the scammer has to do is click on a new city and state for their search location and they have a entirely different group of victims to try and bring into their scam.

It’s free – Not only is Craigslist free for people to post or creating listings, but it is also free to people looking at those listings. This works to the scammer’s advantage. If the scammer is the one placing the listing, for a Secret Shopper job for example, they do not have to pay anything to place that advertisement. Many of the sites that require you to pay to post have a lower number of scams posted simply due to the fact that the scammer is there to make money, and not to spend it. It works the other way too . . . if the scammer is the one searching the posted ads for their next victim, they do not have to pay anything to have access to those listings.

Craigslist does have warning information on their site, and I think that some of their warnings should hold true if you are using their site or another classified ad site.

Deal with local buyers and sellers. If you sell your item and you need to have it shipped someplace you are taking a greater risk. If you deal locally, you can arrange to meet the person face to face to exchange money and the item for sale.

Never wire funds to someone you only know via email conversations. Scammers use services like Western Union and MoneyGram in their scams because they know that once the money is wired off and picked up on the other end there is no way to recover the money. Also, since they are overseas, our law enforcement in the United States cannot just go and pick them up for taking your money. It becomes an issue for the government and law enforcement in the country that they live in. This all goes back to jurisdiction, which we talked about in the past, and you can review here.

One thing that I think that Craigslist could add to their posted warning is that a cashier’s check could take 10 business days or more to go through the clearing process. Just because you take the check to the bank and they tell you that it has cleared, or that it will be verified as good in 24 hours does not mean that the bank knows for sure that this check was written on a good account and has the funds in that account to cover the check. This is the information that is missing from so many of the current internet scam warnings, but is also the piece of information that could save so many scam victims. So why don’t the places that post the warnings understand this and include this information? Personally, I feel it is because they are thinking as a “business” and not as a scam victims, and that is one thing that I can do since I have been there myself.

Had we known back in October of 2002 that the check could take up to 10 business days to go through the entire clearing process and that until that happened we would be liable for the entire amount of the check, then there is no way we would have wired any money off any sooner than 10 business days . . . actually, my husband and I had promised each other that what ever amount of time the bank said to wait to be safe we were going to double to be extra safe, so like I said, if they would have been honest with us there is no way we would have become scam victims.

Social Networking Friend Scam

This is from a Press Release from the FBI today

No, Your Social Networking “Friend” Isn’t Really in Trouble Overseas

According to the Internet Crime Complaint Center (IC3), there has been an increase in the number of hijacked social networking accounts reported to http://www.ic3.gov.

One of the more popular scams involves online criminals planting malicious software and code onto to victim computers. It starts by someone opening a spam e-mail, sometimes from another hijacked friend’s account.

When opened, the spam allows the cyber intruders to steal passwords for any account on the computer, including social networking sites. The thieves then change the user’s passwords and eventually send out distress messages claiming they are in some sort of legal or medical peril and requesting money from their social networking contacts.

So far, nearly 3,200 cases of account hijackings have been reported to the IC3 since 2006.

Cyber thieves are also using spam to promote phishing sites, claiming a violation of the terms of service agreement or creating some other issue which needs to be resolved. Other spam entices users to download an application or view a video. Some of these messages appear to be sent from friends, giving the perception of legitimacy. Once the user responds to a phishing site, downloads an application, or clicks on a video link, the electronic device they’re using becomes infected.

Some applications advertised on social networking sites appear legitimate but install malicious code or rogue anti-virus software. These empty applications can give cyber criminals access to your profile and personal information. These programs will automatically send messages to your contacts, instructing them to download the new application too.

Infected users are often unknowingly spreading malware by having links to infected websites posted on their webpage without the user’s knowledge. Since the e-mail or video link appear to be endorsed by a friend, social networking contacts are more likely to click on these links.

Although social networking sites are generally a safe place to interact with friends and acquaintances, keep in mind these suggestions to protect yourself while navigating the Internet:

Adjust website privacy settings. Some networking sites have provided useful options to assist in adjusting settings to help protect your identity.
Be selective when adding friends. Once added, contacts can access any information marked as viewable by all friends.
Limit access to your profile to only those contacts you trust with your personal information.
Disable options, such as photo sharing, that you might not regularly use. You can always enable these options later.
Be careful what you click on. Just because someone posts a link or video to their wall does not mean it is safe.
Familiarize yourself with the security and privacy settings and learn how to report a compromised account.
Each social networking site may have different procedures on how to handle a hijacked or infected account; therefore, you may want to reference their help or FAQ page for instructions.
If your account has been hijacked or infected, report it to by visiting www.ic3.gov or www.lookstoogoodtobetrue.com.

The Internet Crime Complaint Center is a partnership between the FBI and National White Collar Crime Center (NW3C).