The latest scam to hit American consumers involves counterfeit financial instruments.
It's costing victims millions of dollars each month. Counterfeit checks and money
orders — including postal money orders — are used in the scam, which
often starts with what appears to be an innocent contact via an Internet chatroom
or by email.
Con artists posing as students, tourists, and overseas military personnel ask for help in cashing checks and money orders, or target people looking for love or companionship, in order to exploit their vulnerability. Online auctioneers are also at risk. Scammers buy goods or services on the Web and offer payment by check or money order — often in excess of the actual value of the goods or services.
In most cases, con artists ship the check or money order and ask the victim to cash
it, keep a portion as a "gift," and wire back the rest, usually to an overseas address.
Bank customers are responsible for the checks they deposit, and victims must repay the bank for bad checks. Federal law requires banks to make the funds you deposit available quickly, but it's important for consumers to know that, just because you can withdraw the money, it doesn't mean the check is good. Banks often release funds from a cashier's check or money order before it clears.
Why are there so many victims?
Con artists have found a means of exploiting the charitable nature of Americans. This confidence scam plays to our core values as a society, which often blinds our judgment in dealing with the real issue. Additionally, the Internet brings this scam into our home, where we feel most secure and are more vulnerable.
There are also "non-victims." Anyone who agrees to cash the instruments on behalf of a foreign citizen and keep a portion for themselves are not victims, they are accomplices.
Why Postal Money Orders?
Americans trust the U.S. Postal Service and the security provided by the U.S. Postal Inspection Service. Consumers often believe, incorrectly, that postal money orders and cashier's checks are "good" if they're cashed by a bank and are not subject to recourse. This is not true.
Postal Money Order Security Features
Similar to U.S. currency, postal money orders are designed with colored inks, watermarks, and security threads. Become familiar with the security features of genuine postal money orders:
Where the Counterfeits Come From
Most counterfeits originate overseas. They're produced by an off-set printing process, which creates a document with an authentic appearance. However, fraudsters can't replicate the security features of genuine postal money orders.
For additional information and resources on fraudulent money orders, call the Money Order Fraud Hot Line, run by the Inspection Service's Criminal Investigative Support Center, at (800) 372-8347.