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A Craigslist Scam You Might Fall For
SHORTLY AFTER LISTING A FEW furniture pieces for sale on Craigslist.com, 28-year-old R. Todorova (no relation to this reporter) got a response. A potential buyer, who was moving to the United States from Spain, wrote that he or she was "very interested" in the full-size bed. Since the buyer was still in Spain, a secretary here would send payment and pick up the bed.
The payment was mailed within two days. But a "terrible" mistake occurred: The secretary had cut a check for $2,000 instead of the $150 asking price. Todorova, who asked us to withhold her first name for privacy concerns, was invited to wire the difference back to the buyer, and was even offered to deduct another $100 for her trouble. Sure, this looked suspicious. But Todorova had a check in her hands, and thought she would be safe if she waited to wire the money until the check cleared with her bank.
Before she deposited the check, however, another email came in — this one from someone living in Boston. The email sounded awfully similar to the first email she'd received from the Spain resident. And Todorova was especially suspicious since it was another out-of-town respondent — unusual, she thought, for used furniture listings on Craigslist. (Todorova listed the item in Washington, D.C., and was preparing to move to New York.) She decided to play along. "It almost made me laugh," she says. "It was exactly the same story: a terrible mistake and a check for $2,000 was sent to me."
Such is the typical fake-check scam: A remote buyer feigns interest in buying your goods — sight unseen — and sends you a check or money order for more than the item costs. You are asked to wire the difference. Several days later, the bank discovers that the check is fraudulent and you're responsible for the balance.
It might seem like an obvious ruse to seasoned online buyers and sellers, but check fraud was the fourth most common scam cited in a joint report by the National White Collar Crime Center and the FBI in 2004. And in terms of monetary damage, check fraud tops the list. In 2004, the median dollar loss reported by victims was $3,600, according to the report, compared with $200 for auction fraud and $240 for credit-card fraud.
The fake-check scam has become so common, in fact, that several weeks ago Craigslist.com issued a scam alert and added a warning message that runs with each email generated through the site. "People are overwhelmingly trustworthy and good," says Craig Newmark, the site's founder. "On our site, the number of bad guys is very tiny. Nevertheless, the bad guys are persistent." Craigslist receives about 200 scam complaints a month out of 10 million unique site visits and more than 2.5 billion page views.
The scam, of course, isn't exclusive to Craigslist. "If you advertise something in any classified ad space, chances are good that a con artist will approach you and try to pull one of these fake-check scams," says Susan Grant, director of the National Fraud Information Center, a consumer group. "It has become one of the biggest scams we hear about."
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Catch Him If You Can
The worst part: While federal law protects consumers against credit card fraud, making them liable for no more than $50 of the fraudulent charges, there are no such protections for check fraud.
"If the check turns out to be fake, you are responsible to your bank for anything you withdrew against that amount," says Grant. "So what happens is, these crooks have stolen money from your bank and you are left owing the bank." The bank can recoup the funds from any deposits you have, or sue you for the balance.
This is what happened to a victim who recently filed a complaint with the National Check Fraud Center in Charleston, S.C. The victim had sold a sailboat on the Internet, explains the center's director, Charles Bruce. "The man got the cash, threw the big party and bought another boat. But the bank tracked him down and said, 'We want our money.' He was out nearly $100,000 and declared bankruptcy."
Fortunately, you can avoid such costly mistakes if you heed the following advice.
1. Know the Scam
Be suspicious of any emails or letters that:
* Come from a buyer claiming to be located far away, usually in a foreign country or out of state, who is interested in your goods sight unseen and tries to work through a third party, such as a secretary or associate.
* The email conveys a sense of urgency for you to wire the money, but there are no questions about picking up the item for sale. "These people never really attempt to get the merchandise," says Grant. "They never really make any shipping arrangements. They're not interested in getting the goods — they're interested in getting the money."
* You are sent more money than you're owed. "If someone is paying you and as part of the deal they want you to wire money somewhere, it's a scam," says Grant.
Variations of the check-fraud scam include a lottery or sweepstakes notice ("you are the winner of a cash prize, but in order to receive your winnings, you must pay a fee to cover taxes" and the like) and work-at-home offers (you have to process checks for clients, basically cashing checks you receive and keeping your share).
2. Recognize a fake check
Some forged checks look so much like the real thing that it's practically impossible — even for your banker — to tell the difference. "With color copiers and desktop publishing software, it has become much more difficult to spot a counterfeit check," says John Hall, spokesman for the American Bankers Association.
Compounding the problem: Fakes are often written out of existing accounts (individual or corporate), but the account numbers are fake, or vice versa, so even if you called the bank to confirm that the account exists, you might be mislead.
And because banks are required by law to make available the funds on certain check deposits within two to five days—and many do it even sooner—some consumers falsely believe that this means the check has cleared. In fact, it could take 10 days or longer before a bank finds that a check is bad, says Hall.
"The funds may be available, but that's a false balance," he says. His advice: If you deposit the check, contact your bank a few days later and ask if the check has cleared. If it hasn't, ask why.
Be especially suspicious of checks issued through Qchex.com, an online service that enables consumers to print checks or send them by email to recipients who could then print them. Recently, the Better Business Bureau and the Federal Deposit Insurance Corporation issued warnings that some (though not all) of the checks issued through Qchex are fraudulent. Anyone can register and open an account with Qchex, which does not verify the accuracy of the information it receives — certainly an attractive feature for check forgers, authorities allege. In a response to an inquiry from the BBB, the company that operates Qchex said that it is not its responsibility to verify accounts or funds — it is the responsibility of the person who accepts a check to do so. (By press time, Qchex had not responded to our request for comment.)
For more on check fraud, read our recent interview with Frank Abagnale, the famed forgery and secure-documents specialist whose check-forgery exploits were documented in the 2002 Steven Spielberg film "Catch Me If You Can."
3. After the Fact
Unfortunately, not much can be done to get your money back if you've been victimized by this scam. The Secret Service and the FBI investigate those cases, but working with law enforcement in foreign countries can be fruitless. "I wouldn't hold my breath waiting to get my money back," says Grant.
If you've been scammed, you should file complaints with the Federal Trade Commission, the Internet Fraud Complaint Center, the National Fraud Information Center and the National Check Fraud Center. It won't help you get your money back, but it might help prevent others from suffering in the future.
