With the worsening economy, an increasing number of Kentuckians are being victimized by fraudulent unsolicited business offers commonly originating outside the United States. County Attorneys throughout Kentucky are reporting an upswing in this type of activity. In one case, an elderly victim was defrauded of $1.1 million by a Canadian source before the scam was discovered and stopped.
The most common of these scams begins with the receipt of an unsolicited cashiers’ check in the mail.
According to the Better Business Bureau, “The problem occurs when a consumer deposits the counterfeit check in a bank account and, a few days later, asks the financial institution if the money is “available.” When told yes, the consumer assumes that they can safely draw upon that money. That is not the case! Until the financial institution can confirm the funds have been “finally collected”, the consumer is responsible for any funds they may withdraw against that check deposit. The amount of time it can take for the bank to finally collect the money can vary, particularly with out-of-state or out-of-country checks. “
Accompanying instructions commonly announce the victim has won a sweepstakes or other large prize and must pay a clearance fee or taxes on the winnings. The victim is instructed to deposit the check, and to in turn write a personal check for a portion of the proceeds and mail it to another address. The check sent to the victim, however, is worthless, a fact not usually discovered until the valid victim’s check has been mailed.
The best way for Kentuckians to protect themselves from these scams is to carefully evaluate the offer. Here are some steps you can take:
1. Independently verify the check is from a legitimate issuing financial institution.
Don’t use the telephone number on the check; use directory assistance to acquire the official number of the financial institution to verify the check.
2. Do not use the money until your bank has collected the funds. Funds “availability” is not good enough.
3. If you have any questions about whether a transaction is legitimate, talk to your bank or credit union.
If you think you have been victimized by a scam such as this, contact your local County Attorney.
You may also contact the Federal Deposit Insurance Corporation at 877.275.3342 for checks drawn on U.S. institutions.
If the check is drawn on a foreign bank, contact the United States Secret Service at (202) 406-5572 or go to www.secretservice.gov.
Remember, if it sounds too good to be true, it probably is.