Working Together to Stomp Out Fraud
Posted by Norma Garza, VP Remote Transaction Resources, Credit Union Resources, Inc on 8/18/2017

While there is a plethora of scams from which one can fall victim to, surprisingly enough the criminality of fraudulent checks continues to this day very day in this high-tech digitally enthralled 21st century environment.  It seems like there has been a recent spike in the reporting of credit union’s own corporate, official certified checks.  I noticed this because we have sent out several check fraud alerts to credit unions on the Shared Branching network, something we do as a courtesy. 

Reading what blogger, Lisa Lake, Consumer Education Specialist, Federal Trade Commission (FTC) had to say in reference to check fraud affirmed my suspicions – checks are still a very viable instrument for those wanting to commit fraud or scam a victim.  According to the information on Ms. Lake’s blog¹ and a reference from the BBB Institute for Marketplace Trust, Scam Tracker Annual Risk Report, “Data at a Glance” check fraud ranked #2 in the list of scams and fraud.  It is worth noting the highest age group susceptible being between 18 and 24, while the highest financial loss going to those 65 and older.   That being said, it was certainly satisfying to stop a fraud situation in its tracks.  And even more rewarding to know this was possible due to the efforts and collaborative and cooperative actions of five financial institutions working together to achieve this.  

Reflecting on this recent cooperative experience brought emotions of satisfaction and accomplishment.  It was one of those in your face fraudster moments.  And the thought of the collaboration and cooperation between organizations needs to happen more often than not.  We, as the frontline protectors and keepers of our member’s money, should be vigilant in our efforts to assist in preventing (to the best of our ability and resources) these acts of criminality.  Following your credit union’s internal, as well as applicable, policies and procedures, respectively should be a given.  In addition, being cognizant and applying best practices should help in mitigating potential fraud.

I wasn’t surprised to see a wealth of sites on Google addressing prevention and detection measures, albeit they were geared more so towards consumers. However when you think about it the “how to prevent and detect tips and information” are in essence a guide to those looking to commit this type of criminal activity.    

I came across a site titled, Check Investigative Service²” which happened to have best practices and information on recent scams involving current check scams.  Another site I came across titled, “Consumer Federation of American³” had informative videos, i.e., Fake Check Lottery Scam, Fake Check Work At Home.  Maybe a couple of videos could possibly be used for informational and educational purposes. Another informative site being that titled, “Fraud!Org4°”, a project of the National Consumer League, which had the following to offer:

  • There are many variations of the fake check scam. It could start with someone offering to buy something you advertised, pay you to do work at home, give you an “advance” on a sweepstakes you’ve supposedly won, or pay the first installment on the millions that you’ll receive for agreeing to have money in a foreign country transferred to your bank account for safekeeping. Whatever the pitch, the person may sound quite believable.
     
  • Fake check scammers hunt for victims. They scan newspaper and online advertisements for people listing items for sale, and check postings on online job sites from people seeking employment. They place their own ads with phone numbers or email addresses for people to contact them. They buy “sucker lists” on the black market which has sensitive information of people who have been previously scammed. And they call or send emails or faxes to people randomly, knowing that some will take the bait.
     
  • They often claim to be in another country. The scammers say it’s too difficult and complicated to send you the money directly from their country, so they’ll arrange for someone in the U.S. to send you a check.
     
  • Scammers tell you to wire money to them after you’ve deposited the check. If you’re selling something, they say they’ll pay you by having someone in the U.S. who owes them money send you a check. It will be for more than the sale price; you deposit the check, keep what you’re owed, and wire the rest to them. If it’s part of a work-at-home scheme, they may claim that you’ll be processing checks from their “clients.” You deposit the checks and then wire them the money minus your “pay.” Or they may send you a check for more than your pay “by mistake” and ask you to wire them the excess. In the sweepstakes and foreign money offer variations of the scam, they tell you to wire them money for taxes, customs, bonding, processing, legal fees, or other expenses that must be paid before you can get the rest of the money.
     
  • The checks are fake but they look real. In fact, they look so real that even bank tellers may be fooled. Some are phony cashiers checks, others look like they’re from legitimate business accounts. The companies whose names appear may be real, but someone has dummied up the checks without their knowledge.
     
  • You don’t have to wait long to use the money, but that doesn’t mean the check is good. Under federal law, banks have to make the funds you deposit available quickly–usually within one to five days, depending on the type of check. But just because you can withdraw the money doesn’t mean the check is good, even if it’s a cashier’s check. It can take weeks for the forgery to be discovered and the check to bounce.
     
  • You are responsible for the checks you deposit. That’s because you’re in the best position to determine the risk–you’re the one dealing directly with the person who is arranging for the check to be sent to you. When a check bounces, the bank deducts the amount that was originally credited to your account. If there isn’t enough to cover it, the bank may be able to take money from other accounts you have at that institution, or sue you to recover the funds. In some cases, law enforcement authorities could bring charges against the victims because it may look like they were involved in the scam and knew the check was counterfeit.
     
  • There is no legitimate reason for someone who is giving you money to ask you to wire money back. If a stranger wants to pay you for something, insist on a cashiers check for the exact amount, preferably from a local bank or a bank that has a branch in your area.

Ultimately, the above-mentioned experience and the unfortunate spike in recent fraudulent check activity caused me pause enough to stop from the routine of simply pushing out the alerts to share the positive and joint efforts of five financial institutions and say, thank you.  You know who you are.  And, I would be remiss if I didn’t say thank you to the likes of the Robbie Henegar’s of First Community CU and Ashley Romero, CO-OP Financial Services Fraud Dept., and all who are diligently and tirelessly vigilant in stomping out fraud!

¹ https://www.consumer.ftc.gov/blog/dont-bank-check

² http://www.ckfraud.org/cis.html 

³ http://consumerfed.org/consumer_info/consumer-tips-fake-check-scams/

4 http://www.fraud.org/fake_check_scams

Categories: Business Partners, Compliance, Education & Training, Remote Transaction
Comments (1)
***** This comment is awaiting approval *****
Posted by rajesh on 12/7/2017 9:20 AM:
good one.
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