Fraud and theft are not new. Fraudulent schemes of one type or another have probably been present since man first learned to speak. But with the rise of the internet and the ease of transferring money, there are more ways to steal from you than ever before. Here are some of the more popular ones:
-Advance fee fraud: you are contacted by e-mail by someone claiming to be somewhere in Africa. They tell you that, as a result of a plane crash, civil war, coup, or death of someone without heirs, they have access to a large sum of money. They tell you that they need your help to transfer the money before it is lost. In exchange, you will get to keep a large percentage of the money. The catch is that the person needs a little money (for fees, bribes, etc.) in order to transfer the big sum to you. You pay this fee to a foreign account as directed. But then your contact tells you that more money is needed because of some new "problem." By the time you figure out that you are getting scammed, your money is gone.
The above is a simple example of Nigerian e-mail fraud (so-called because that is where much of it comes from; it is also called "419 fraud" after the section of the Nigerian criminal code that it violates).
Most of us would see this as a scam initially, and successfully avoid it. Unfortunately, most advance fee scams are not that simple. Many involve the scammer's giving you an apparently genuine check on the front end, and later (sometimes as much as 30 days later or even more) asking for some of the money back. You wire the money or write a check. Only afterward do you discover that the check you received was stolen, forged, or counterfeited.
This scam works because your bank (if it fails to detect the check as counterfeit) "provisionally" credits your account with the money. In other words, the money shows up in your account until your bank finds out, in the course of trying to get the check paid by the bank it is drawn on, that the check is a phony. The payment process for a foreign check can be lengthy, and in excess of thirty (30) days. This gives the scammer a window of opportunity to get your money before his fraud is detected.
There are dozens of ways this scam can work. We have seen it used against people in numerous situations, including:
-car sales (buyer overpays and asks you to refund part of the money for shipping or some other expense; sometimes you lose your money and your car); this can happen, of course, with any type of merchandise you sell.
-fake lotteries (often appearing to be from Canada; you are given a large check and asked to send back a processing fee of up to several hundred dollars);
-foreign exchange students (money is sent ahead to be held for a foreign student's expenses; the host is contacted later and said that the trip is cancelled or delayed, and asked to send the money back, which the host does before finding out the original check was bogus).
The ways of getting your money are endless. As a general rule, be very suspicious of foreign checks, even those appearing to be certified or cashier's checks. Also, never wire money for payment unless you are absolutely sure the transaction is legitimate -- monies transferred by wire are virtually impossible to recover once sent. Lastly, do not count on your bank to detect counterfeit checks, and do not rely on the bank's statement that a check you have deposited has "cleared."
While the above represents some of the newer ways that fraud and theft are committed, the old ways have not gone away, such as when:
- Your checkbook is stolen and your name forged;
- Your employee embezzles funds by fraudulent means, including forgery and fraudulent wire transfers;
- Unauthorized withdrawals are made from your account;
- Your credit card number or account information is stolen (through internet "phishing," through a telephone scam, by stealing your mail, by looking through your trash, or by dozens of other methods).
- Someone opens a bank account in your name, has checks printed, and negotiates them (resulting, sometimes, in false arrest);
- Someone uses your driver's license number to pass a check through bad check detection systems;
We have helped people in all of these situations, and have litigated cases with losses ranging from thousands of dollars to millions of dollars. We represent both individuals and businesses that are victimized. Even if your bank tells you that you are responsible for the loss, contact us. We may be able to help you recover the money that you have lost.