Thursday, October 25, 2007
Rubber Lottery Checks Bounce High
Terry Thornton, senior vice president of the fraud services department for Comerica Bank in Auburn Hills, MI recently said that two of the most common scams they're seeing with fake checks are for lottery winnings and work at home scams. Consumers receive a check and this looks like something for nothing. Who cares that they never entered the lottery, much less ever heard of it. They're a winner, they're richer, and why question a good thing. The person deposits the check follows the instructions, sending back a part of the funds. This is usually sent through a wire which processes faster than a check. This scam keeps happening because it keeps working.
The National Consumer League, a nonprofit consumer group in Washington, D.C. estimates that the average loss on these scams is $3,000 to $4,000. For many customers, that is a lot of money. Some of the losses are incurred by the customer, and sometimes it passes to the bank. Customers just can't pay. In the eyes of many bank customers, it was the banks fault any way, as they said the check "was good" and put the money in the account.
These scams are at an epidemic proportion. Banks need to educate staff to watch closely and use the rules available to them to protect the bank and the customer. Watch the checks themselves, talk to the customers making the deposits and do all that is reasonable to avoid contributing to the spread of this problem. Remember that a large sample of these letters are available for training from BOL. The letters change periodically, so it is important to keep up. The newest letter example, being added today, isn't a lottery scam, but a refund notice from the IRS. Who wouldn't like to get money back from the IRS? But it is important not to bite. It is a fake.
The FTC has a tip sheet for consumers on this topic, "Giving the Bounce to Counterfeit Check Scams".
Terry Thornton, senior vice president of the fraud services department for Comerica Bank in Auburn Hills, MI recently said that two of the most common scams they're seeing with fake checks are for lottery winnings and work at home scams. Consumers receive a check and this looks like something for nothing. Who cares that they never entered the lottery, much less ever heard of it. They're a winner, they're richer, and why question a good thing. The person deposits the check follows the instructions, sending back a part of the funds. This is usually sent through a wire which processes faster than a check. This scam keeps happening because it keeps working.
The National Consumer League, a nonprofit consumer group in Washington, D.C. estimates that the average loss on these scams is $3,000 to $4,000. For many customers, that is a lot of money. Some of the losses are incurred by the customer, and sometimes it passes to the bank. Customers just can't pay. In the eyes of many bank customers, it was the banks fault any way, as they said the check "was good" and put the money in the account.
These scams are at an epidemic proportion. Banks need to educate staff to watch closely and use the rules available to them to protect the bank and the customer. Watch the checks themselves, talk to the customers making the deposits and do all that is reasonable to avoid contributing to the spread of this problem. Remember that a large sample of these letters are available for training from BOL. The letters change periodically, so it is important to keep up. The newest letter example, being added today, isn't a lottery scam, but a refund notice from the IRS. Who wouldn't like to get money back from the IRS? But it is important not to bite. It is a fake.
The FTC has a tip sheet for consumers on this topic, "Giving the Bounce to Counterfeit Check Scams".
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