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FREQUENTLY ASKED QUESTIONS

ALLIANCE FOR CONSUMER FRAUD AWARENESS

The Alliance

What is the Alliance for Consumer Fraud Awareness?
The Alliance for Consumer Fraud Awareness (ACFA) is a private-public initiative spearheaded by the U.S. Postal Inspection Service. Members represent financial institutions, associations, consumer advocacy groups and businesses.

Tell me more about the National Consumer Fraud Awareness Campaign and its goals.
Scams that involve counterfeit checks, gift checks, travelers cheques or money orders have become increasingly popular and are targeting virtually every American primarily through email, but also via U.S. Mail and phone solicitations. These schemes include: foreign business offers; sudden riches; love losses; work-at-home; overpayments and rental schemes.

The Consumer Fraud Awareness Campaign launched in October, 2007 with the goal to increase awareness about the schemes, to give consumers valuable information about protecting their assets and to provide steps they can take to report solicitations.

The Alliance has supported the creation of a new National Consumers League (NCL) Web site, fakechecks.org, which consumers can visit to educate themselves on the scams and learn why, if the offer looks too good to be true, it probably is.

Who is the target audience for the campaign?
With the advent of the Internet, the target audience now includes everyone over the age of 18. While this range may seem large, scammers target as many people as they can of all age groups knowing that some will fall victim.

Where will the campaign be seen?
The Consumer Fraud Awareness Campaign will use a variety of creative techniques to convey information about fake check schemes and ways for consumers to protect themselves. Tactics will include educational spots on televisions, print ads in major magazines, and an extensive online campaign.

News conferences, news stories and speaking engagements will be coordinated to disseminate information on how consumers can protect themselves against fraud. Consumers will be directed to the campaign Web site – fakechecks.org – for additional information.

How is the campaign being financed?
The campaign is financed with money from criminal fines and penalties funds. The Postal Inspection Service uses funds from criminal fines to create public awareness campaigns (such as the 2 SMRT 4UTM Internet Safety Awareness Campaign that launched in November 2006).

In addition, some campaign members have also made contributions to the National Consumers League to finance the building and maintenance of the campaign Web site. Members also have provided in-kind services to help get campaign messages out, such as distributing information to customers and employees.

What should fraud victims do?
If a victim recently wired money to fraudsters, the victim should report the incident to the security department of the business who handled the wire transfer immediately upon recognizing the problem. If the money has not been retrieved by the fraudster, the victim may be able to recover the money.

Consumers and victims should also print out e-mails from the fraudster. Law enforcement officials will need the e-mail header information for their investigation.

Finally, victims should also report the incident at the campaign Web site, fakechecks.org. Or, if a person suspects that someone is trying to pull a fake check scam, he or she should not deposit the money — report it to the National Consumers League’s Fraud Center at www.fraud.org.

Can victims get their money back?
Unfortunately, there is little chance of victims’ getting their money back. This campaign was created to educate Americans about these scams.

What is the connection between mail fraud and internet fraud?
Any time the U.S. Mail is used to advance a crime, the Postal Inspection Service
gets involved.

Fake Checks

What is a Fake Check Scam?
It’s a fast-growing fraud that could cost you thousands of dollars. There are many types of fake check scams, but it all starts when someone gives you a realistic-looking check or money order and asks you to send cash somewhere in return. It’s phony, and so is the person’s story, but that may take weeks to discover. Now your bank wants the money back. Turns out that just because you can get the cash doesn’t mean the check or money order is good. If it’s not, the crook will be richer and you’ll be the loser, because you’re responsible for the checks or money orders you deposit or cash. That’s how the scam works.

How do the scammers find victims?
They scan newspaper and online advertisements looking for people listing items for sale or places to rent. They check postings on online job sites from people seeking employment and place their own ads with phone numbers or email addresses for people to contact them. They meet people through social networking sites, chat rooms, and other places online. They make phone calls and send faxes, emails or letters to people randomly, knowing that some will take the bait.

How can I tell if a check or money order is counterfeit? Know the scenario of a potential scam:

1. No legitimate transaction includes overpayment or requires a refund.
2. Typically, phony checks and money orders are so realistic-looking that even bank tellers can be fooled. You can get information from money order and check providers with tips to help tell if their products are real.
3. The best way to avoid being victim is to be cautious. If it seems too good to be true, it likely is. If the person approaches you and wants to complete the transaction in a hurried manner or is pressuring you to do so, reconsider the transaction altogether.

Why do the scammers want cash to be sent using a money
transfer service?
Because it’s fast – the money is often available to them within minutes. That means the victim may not be able to stop the payment before it’s received. Since the money is usually picked up in cash and in person, it may be impossible to find the crook and get it back. Some scammers are also instructing victims to send cash using a delivery service. If you suspect you’ve been scammed, contact the money transfer service or delivery service you used immediately – it may be possible to stop the crook from getting the money if it hasn’t been picked up yet.

Why can’t my bank, credit union, or check cashing service tell if the check or money order is good?
When you deposit a check or money order, federal law requires you to have access to the funds within one to five days, but the actual processing takes longer. Banks, credit unions, and check cashing services accept checks and money orders based on your identification. They don’t have any information about the source. Because the check or money order goes back to the source, it can take a while for counterfeits to be discovered. For instance, if a check seems to come from a business account, the business may not learn about it until it appears on the next statement. You’re responsible because you’re in the best position to determine the risk of accepting the check or money order – you dealt with the person who gave it to you.

What if I deposited or cashed the check or money order but haven’t sent the cash yet?
Immediately notify your bank or credit union, or a check cashing service if you used one. You will need to return the money or have your account corrected. Explain that you’ve been scammed and ask not to have any negative action taken against you such as closing your account or reporting you to a checking account abuse database. If that has already happened, ask if that action can be reversed. File a report with your local police to put on record that you’re a scam victim. Report the scam to the National Consumers League, which will pass the information along to law enforcement agencies.

What if I have already sent the cash?
Immediately notify your bank or credit union, or a check cashing service if you used one. You will need to return the money or have your account corrected. Explain that you’ve been scammed and ask not to have any negative action taken against you such as closing your account or reporting you to a checking account abuse database. If that has already happened, ask if that action can be reversed. If there isn’t enough in your account to cover the loss, you could be sued to recover the funds. Try to work out a repayment plan. File a report with your local police to put on record that you’re a scam victim. Report the scam to the National Consumers League, which will pass the information along to law enforcement agencies.

How much could I lose in a fake Check Scam?
According to the National Consumers League, victims lose an average of $3,000 to $4,000 – a significant amount for most people. But your losses could be even higher. If you used some of the money to pay bills or for other purposes, you’ll have to pay that amount back to your bank or credit union as well. There may also be bounced check and overdraft charges as a result of the scam. And you could lose more than money – your account could be closed and it could harm you credit rating. Some victims have even resorted to criminal acts to recoup their losses.

How can I avoid becoming a victim?
Think about it – there is no legitimate reason why anyone would give you a check or money order and ask you to send cash anywhere in return. Be aware that just because you can get the cash quickly – usually in one to five days – doesn’t mean the check or money order is good. Crooks take advantage of the fact that counterfeits can take weeks – even months – to discover. By then you’ve sent the money and have to pay it back to your bank. Only cash a check or money order from a person or business you know or trust. When making any business deal, do not be rushed: take your time to be certain you trust the person/people you are dealing with. You can be a fraud fighter by telling everyone you know – your family and friends, the people with whom you work or go to school, the people that attend your place of worship, the people you chat with online, the members of clubs or other groups to which you belong – to learn the warning signs of fake check scams and know how to prevent becoming a victim. Send them the links to the videos and quizzes on this Web site and encourage them to pass the word along.

Does fakechecks.org have any special features?
The Alliance believes it should be easy for consumers to tell friends and family about these scams. There is an e-mail option that consumers can use to quickly send messages to people they feel might fall prey to some of the scam scenarios.

How many U.S. Postal Service money orders are issued daily?
In 2006, the U.S. Postal Service, one of many money order merchants, issued 166 million money orders, valued at nearly $30 billion. Postal Money Orders are a safe, convenient, and economical alternative to sending cash through the mail. They can be purchased from any Post Office in the U.S. and are available in denominations up to $1,000. A current government-issued or state-issued picture identification is required for money order purchases of $3,000 or more in a single day.

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