When Winning Money Doesn’t Pay

Fred Joseph - Fraud IssuesRecently, my 83-year old mother received a mailing containing a form and a check in the amount of $4,250. The form stated that it was official notice that my mother was a 2nd prize winner in the second category of the European, African and USA Consumer sweepstakes, in conjunction with USA Departmental Stores and that she had won $250,000 in the consumer’s sweepstakes lottery. The check purportedly was to help her pay the processing fee in the amount of $3,850. She was advised to contact the claims agent to start the claims process and to activate the check. My mother immediately recognized that this was a scam and sent all of the documents to me. Upon review, it is clear to me that this was a fake check scam.

According to the Consumer Federation of America, a fake check scam can cost you thousands of dollars unless you know the danger signs:

  1. If someone gives you a check or money order and asks you to send money somewhere in return, it’s a scam. That is not how legitimate sweepstakes operators or other companies operate. If you have really won, you will pay taxes directly to the government.
  2. A familiar company name doesn’t guarantee that it’s legitimate. Crooks often pretend to be from well-known companies to gain people’s trust. Find the company’s contact information independently, online or through directory assistance, and contact it yourself to verify the information.
  3. The check or money order may be fake even if your bank or credit union lets you have the cash. You have the right to get the cash quickly, usually within 1-2 days, but your bank or credit union can’t tell if there is a problem with the check or money order until it has gone through the system to the person or company that supposedly issued it. That can take weeks and (if you follow their directions) you’ll have already wired the money away as part of the scam. By the time the fraud is discovered, the crook has pocketed the cash.
  4. When the check or money order bounces, you will have to pay the money back to your bank or credit union. You are responsible because you are in the best position to know if the person who gave it to you is trustworthy. If you don’t pay the money back, your account could be frozen or closed, and you could be sued. Some victims are even charged with fraud.
  5. Sending money using a money transfer service is like sending cash – once the crook picks it up you can’t get it back from the service. It’s not like a check that you can stop after you’ve given it to someone or a credit card charge that you can dispute. But if the money has not been picked up yet, you may be able to stop the transaction. Contact the money transfer service immediately if you think you’ve been scammed.

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