Published: November 2007

FakeChecks.org: A new consumer anti-fraud resource

Coalition: Alliance for Consumer Fraud Awareness

FakeChecks.org, a new web site and public awareness campaign, targets the most common variations on the growing problem of counterfeit and fake check fraud. It features frequently asked questions (FAQs), tests you can take to gauge your vulnerability, and humorous videos to with key messages.

People nationwide are being duped by scams that trick then into accepting phony checks or money orders and wiring some of the money to scam artists.

Consumer Action has joined the National Consumers League (NCL), the Postal Inspection Service and other partners to form the Alliance for Consumer Fraud Awareness and launch a public awareness campaign aimed at helping consumers recognize fake check scams and avoid becoming victims.

These scams have become the top telemarketing fraud and the second most common Internet fraud reported to NCL's Fraud Center (fraud.org). According to NCL, by Sept. 15, 2007 it had received more reports about fake check scams than in all of 2006, a 60 per cent increase.

Victims of fake check scams are losing an average of $3,000 to $4,000, the cost of a used car or other major household expenditure. The full extent of this fraud is unknown, but in a telephone survey of 2,000 adults recently commissioned for the Alliance for Consumer Fraud Awareness, 35 per cent of respondents said they had been approached by someone who sent them a real-looking check and asked them to send money somewhere in return.

The good news is that not everyone who is approached in a fake check scam falls for it. According to NCL, only 28 per cent of the consumers who report fake check scams to its Fraud Center say they have already sent the money. But if 35 per cent of the adult population in the U.S. is being exposed to fake check scams, and if just 28 per cent of those people were to send the money, more than 21 million victims of the scam would be U.S. residents.

“The most important thing consumers need to know to protect themselves from fake check scams is that there is no legitimate reason why anyone would give you a check or money order and ask you to wire money anywhere in return,” said Susan Grant, NCL Vice President, Public Policy. “No matter the details of the scheme—whether they’re trying to purchase something from you, asking for your help moving money around, or saying you’ve won a foreign lottery—it’s a scam.”

The six most popular scams are:

  • Foreign Business Offers: Scammers pretend to be businesspeople or government officials and promise millions of dollars. But real companies and government agencies don’t offer legitimate business propositions to people they don’t know.
  • Love Losses: The scammer poses as a romantic interest online, and promises to come to the U.S. to be with the victim. Soon after, the online friend asks the victim to cash a check or money order to cover “travel expenses.”
  • Overpayments: Scammers buy merchandise online, and then claim they mailed the wrong amount by mistake. The seller is asked to deposit the “wrong” check anyway, and then return the “excess” amount to the scammer. But the check doesn’t clear, and the victim has sent the scammer his own money.
  • Rental Schemes: Scammers claim to be moving to the area, and put down a rental deposit. Then they tell their landlord they have unexpected expenses, so they ask for some of their deposit back as a favor. They never move in, and the deposit check never clears.
  • Sudden Riches: The scammer claims the victim has won a foreign lottery or sweepstakes. The notice comes by mail, phone, fax or email. Consumers should know that winners of real cash prizes are notified by certified mail.
  • Work-at-Home: The scams promise easy money by “processing” checks. The victim deposits the checks and sends the money to the scammer, minus a small fee. Legitimate companies don’t do business like this.

Lead Organization

National Consumers League

More Information

Fake Checks.org | National Consumers League

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