Remember the infamous Nigerian 419 scam? I wrote three years ago about how annoying it was to get these bogus offers practically every other day and expressed surprise that anyone would still fall for it now that it was well known. Thankfully I seem to have been dropped from the mailing lists and have not received any such offers for well over a year now, but it turns out that a variation of the scam using cashier’s checks has been used to defraud even fancy law firms for hundreds of thousands of dollars.
Cashier’s checks work like this. Banks take money from your account and issue a check in the bank’s name to whoever you name the recipient to be. Then you give that check to that person who deposits it in their bank. Since the check is issued by your bank and is drawn from their account and not from your private one, cashier’s checks are assumed to be almost as good as cash and the recipient’s bank usually accepts it as being good so that the recipient gets access to the money almost immediately.
I had assumed that once you deposit a cashier’s check in your account and are told that the check has ‘cleared’ (i.e., that the money is now available for your use), that meant that everything had gone smoothly. But I now discover that just because your bank tells you that you have the money to spend does not mean that they have verified that the check is good. If it turns out otherwise, they can demand repayment from you even if you have spent the money.
This is what happened to law firms who were scammed using bogus cashier’s checks. A client gave them a cashier’s check and asked them to wire him the remainder of the money after the firm had taken out its fee. They did so when their bank released the money into their account. When the bogus cashier’s check later bounced, the court ruled that the law firm had to repay their bank the amount of the check. The client had meanwhile disappeared.
This abuse of the cashier’s check system is worrisome since they are used widely for transactions as a secure means of payment. I have driven out of showrooms with a new car purchased using a cashier’s check. Cashier’s checks are also familiar to me since I have family all over the globe. Whenever there is a need to send money cheaply but securely to them, the preferred method is the cashier’s check. If they begin to be treated with suspicion, it is going to be a real nuisance.
The “overpayment/cash refund” trick is actually quite old; it originated with horse-stealers and auto thieves. The idea was the scammer would propose to buy a car listed for sale, offering a price that’s significantly above market. The higher price is justified by the fact that it’s for a saudi prince (or whatever) and it needs to be shipped by boat (or whatever) The victim is wired a check for the full amount, plus the cost for the trucking company, plus it’s rounded up to a convenient couple thousand dollars. The victim is told that the trucking company is coming and to pay the trucking company with cash, and if there’s any left-over to leave the remaining cash balance in the glove-box. The transport company shows up (they’re in on the scam) and loads the car, and leaves. The scammer has now just been PAID to steal the victim’s car, and the scammers’ expenses.
This basic scam can be internetted very easily.
Craigslist is a huge magnet for these scams. Basically, putting an ad up on CL will often get you at least one respondent who is pushing the prelude to this scam. If you advertize as a tutor, you are *guaranteed* to get propositioned for this every few weeks, in the form of a claim to be a wealthy person from overseas who’s kid needs tutoring, and a question about how many months in advance can they pay.
There’s an entire blog about this.
http://clscambuster.blogspot.com/
If you at all use Craigslist for any kind of business, be on the lookout and head it off early. I now don’t even respond to the obvious scammers, and for those that are borderline, include a warning that I don’t take check overpayments.
Another version involves posting an advertisement for a personal assistant, office assistant or similar. They will claim to be traveling out of the country, but ‘hire’ someone sight unseen. The first job is to cash a cashiers check they’ll send you, then put some of the money into a money order and send it elsewhere, keeping a portion as your first paycheck.
As noted above, the rubber cashier’s check scam is actually pretty old. A recognizable variant was used in the 15th and 16th Centuries in Europe with financial paper issued by foreign but reputable banks which might be counterfeit or forged.
Yeah. 99% of the returns I get from CL are scam and spam. Some are weirdly complex and highly entertaining.
Mano, I’ve just received this obvious scam from a Craigs List posting I have for some carvings.
Thanks for the prompt response to my mail.I will be buying the item
from you so please kindly withdraw the advert from CRAIGSLIST.and i
will be paying you via bank certified check from my Bank and the
payment will be delivered to you via United Parcel Service (UPS or
FEDEX) and i will like you to get back to me with the following
information to facilitate the mailing out the check to you… kindly
get back to me with the..
Name to be on the payment………..
Home address………..
City…………..
State………..
Zip Code…………..
Cell phone #…………….
I will make arrangements for the pick up as soon as you have your
money I am completely satisfied with the advert and the payment will
be delivered within 2-3 working days.** I use a hearing impaired phone
# and will receive your calls via email ** N.B UPS and FEDEX does not
deliver to a P.O box addresses.
When I replied that they were still available, I immediately received this reply, which indicates there is a bot involved.
Of course, I won’t be taken in by this scam and hope that others won’t either.