Criminals come up with new scams and new ways to commit fraud every day. However, there are some old schemes that sound so convincing that people still easily fall for them.
Basic Rules to Remember:
Use common sense. If it sounds too good to be true, it probably is.
Never give personal information to a stranger who contacts you, whether by phone, email or other means.
You are responsible and liable for items you cash or deposit into your account.
No matter how urgent someone claims a deal or job offer is, you should research and confirm its legitimacy.
Watch Out For:
New accounts or credit cards you did not apply for.
Debits on your account you cannot explain.
Inaccurate information on your credit reports. Click on the link for information on how to request your credit report, what to look for, and who to contact if you believe your identity has been stolen.
Missing bills or other mail, indicating your account information may have been stolen.
Receiving calls or letters from debt collectors for things you did not buy.
Familiarize yourself with the following scam scenarios:
These scams all can sound credible at first, but when strangers start asking you for your personal information or to deposit checks or wire them money, it is usually a scam. Contact a BankStar Financial Associate with any questions or to report fraud or potential fraud.
Money Mule/Online Job Scam
Criminals often target unsuspecting victims to be middlemen to launder stolen money or merchandise for them. The victims are unaware that the funds or merchandise are stolen and are persuaded to transfer the funds or goods for the criminal. They sometimes lure their victims by promising lucrative job opportunities that will allow you to work from home.
These scams often start when a victim responds to a job posting, often on a reputable online job site, for a “payment processing agent”, a “money transfer agent”, or some similar title. The criminal will then send the stolen funds or goods to the money mule and ask them to wire or transfer some or all of the money to another account for the criminal, masking their identity and the source of the funds. In other cases, the “employer” may ask you to receive deposits into your personal existing accounts (or create new accounts) and then make transfers to other accounts, often overseas.
The victim may think this is a legitimate job as they are paid a “commission” for each transaction they perform. The money mule may not know they are part of a scam until their bank contacts them regarding suspicious transactions. Often the bank will close their accounts and they can be held responsible for the stolen funds.
Be aware of foreign companies or “employers” requesting “money transfer agents” in the United States. Be cautious of an employer offering you a job without an interview and do not provide your Social Security number or other sensitive information unless you can verify their identity and legitimacy. Never open a new bank account to receive or transfer money from someone you do not know. If someone asks you to deposit money for them and then transfer it somewhere else, it is not a job. It is fraud. Never wire funds, make transfers, or send or receive packages for people or companies you do not know, even if they offer to give you a commission. This is likely fraud and you should report it to police.
Nigerian Letter Scam
Most of us have probably heard this one and it is so far-fetched that it is hard to believe people are still duped into it. This scam usually starts with the victim receiving an unsolicited letter from someone claiming to be a high-ranking government official or even royalty from Nigeria or another foreign nation.
The sender will offer you a large sum of money as a reward for your help transferring money into foreign bank accounts. They may ask you for your account numbers and bank information to send you further instructions or to deposit funds to your account.
These get-rich-quick schemes often involve complex transfers of funds and sending money overseas. The crooks usually send you funds that they want you to send somewhere else, or use the account information you provided them to defraud your account. It is extremely unlikely that the criminals will come through with the reward or commission they promised you and even if they do, the transaction is probably illegal. Do not risk your money, identity, or good standing.
Lottery or Sweepstakes Scam
Lottery and sweepstakes scams are becoming more prevalent. The instigators use multiple contact methods (phone, email, direct mail) to con US citizens into thinking they have won a foreign lottery prize. The particular details can vary by scam. For instance, the name of the lottery, the sponsoring country or group, and the prize money will change frequently. They try to validate their ruse by referring to actual financial institutions or companies or claiming an affiliation with a true government agency.
The scam is usually initiated with a notification that you have won a lottery or sweepstakes that you didn’t even enter. You may be asked to supply your bank account information, personal information, copies of your driver's license or passport, etc. to "verify your identity"; in other words, so the criminal can steal your identity.
For some scammers, your identity is all they are after. However, many crooks take this scam a step further. They claim you must first pay a small percentage for “taxes” or some other fee, and then you will receive your winnings. Usually you will be instructed to wire the fees through Western Union or a similar service. Once you send them those funds, they will either continue to ask you for more or simply move on. The “lottery winnings” are never sent to the victim.
Real and legitimate lotteries and sweepstakes will never require you to pay taxes in advance to receive your winnings. Be aware of emails or letters that declare you have won money, especially if you have never entered a contest. Never give anyone your personal or financial information, no matter what they claim. Participating in foreign lotteries is illegal.
Overpayment/Counterfeit Check Scam
This type of scam begins with someone responding to a real ad that you posted. They offer to buy the item you are selling and pay with a cashier's check, money order, or the like.
Someone responds to your posting or ad, and offers to use a cashier's check, personal check or corporate check to pay for the item you're selling. They will then come up with an excuse to make the check for more than the asking price, and ask you to wire them back the difference after you deposit their check. After you deposit the check and wire the excess funds back to the "buyer", you find out the check has bounced. You are now liable to your bank for the entire amount.
These scams are frequently internet-based, stemming from a post you made on eBay or Craigslist for example, but they can also happen with phone transactions. Cashier’s checks and money orders may seem more secure for you as the seller but they are usually counterfeit. Scammers send monetary instruments that look legitimate, contain watermarks and other security features, and may be indistinguishable from the real thing. However, a check made for more than the purchase price is a red flag.
You must know who you are dealing with and confirm the buyer’s name, physical address, and telephone number. Never accept a check for more than your selling price, from anyone, no matter how tempting. If a buyer requests you wire funds back to them, terminate the transaction and report it to police.