Wire transfer requests may be a ‘red flag’ for fraud

Tuesday, November 01, 2011


Consumer Action is warning consumers that requests to wire money through Western Union or MoneyGram are a “red flag” that the call, email, or online posting may be a scam. Funds sent via wire transfer are hard to track—or get back—once received by scammers and are usually not recoverable by law enforcement or banking officials. Do not wire money to anyone unless you are absolutely sure who the recipient is!

Below are several scenarios in which the scammer requests the consumer to wire money through Western Union or MoneyGram:

Online rental scams. The rental property listing usually shows pictures and prices. Once you contact the “landlord,” he or she requests that you wire money for the deposit and first month's rent in order to receive the keys to the rental unit. When you ask to inspect the property, the “landlord” claims to be out of town and will mail the keys to you. Most of the time, the person communicating with you does not even own the property listed.

Fake emergency appeals. In this con, someone phones you anonymously and asks, “Do you know who this is?” They hope you will think it is a friend or relative. Then the caller claims to be in jail or in desperate need of cash. Many people have been tricked into wiring money to a “grandson” or “granddaughter.” Never volunteer information to someone who calls you on the phone. Hang up on people who will not identify themselves. Before you wire money, check with other family members to make sure there is a legitimate emergency.

Work-at-home scams. If your income is tight, an offer to work at home stuffing envelopes or doing other simple tasks might sound attractive. Don’t fall for work-at-home scams. If you respond, you’ll be asked to pay in advance for supplies or “training materials.” These offers are completely bogus. You will never make any money from a work-at-home scheme.

Mystery shopper scam. Another enticing offer is for “mystery shoppers”—people who get paid to evaluate businesses. In one mystery shopping scam, the crook sends you a bogus check telling you to use some of it to complete your mystery shopper assignment (making purchases and sending the remainder back, or sending money via a particular transfer service, for example). What ultimately happens is the check bounces and you are held responsible for the real dollars you spent or transferred to the scammer. Mystery shopping is legitimate, though it’s generally not high paying, and it doesn’t require shoppers to spend or send large amounts of money.

Government grant scam. Many consumers have received unsolicited calls promising cash grants from the government if they pay a fee and disclose their bank account information. Often, the swindlers claim that bank data is needed in order to directly deposit the grant into the victim’s account, but once the crooks have the bank account numbers, they can steal all the victims’ money. The swindlers have also requested that money be wired to them. Once you have paid the fee, the swindlers continue to ask for money in the guise that another fee would increase the cash grant. A legitimate issuer of grants would not contact consumers unsolicited.

Fake check scams. When you place an ad to sell something, your biggest concern may be finding a buyer, but making sure the check is good can be just as important. Crooks often scan want ads looking for victims. A crook might answer the ad and offer to pay you using a “cashier’s check” for an amount greater than the sales price. Then you are asked to wire the remainder of the money back to them or to give the extra money and the merchandise to a “shipper.” The check turns out to be a fake and you lose the merchandise and the money.

Be suspicious if someone wants to give you a check for more than you are actually owed if they are purchasing something from you. Inspect all cashier’s checks carefully and call or visit the bank it’s drawn on to verify that the check is valid. Look up the bank online or in the phone book because contact information printed on the check might be bogus.

Protect yourself from scams

  • Don’t be afraid to say no.
  • You don’t have to talk to telemarketers—hang up if you are uncomfortable or you don’t trust the caller.
  • Don’t give in to high-pressure sales tactics.
  • Never volunteer information to someone who calls you on the phone.
  • Call the police if you feel threatened.
  • Don’t reveal your credit card, bank account or Social Security numbers to unfamiliar companies or people.
  • Do your own research on charities and other solicitors.
  • It’s your money—never be afraid to ask where it’s going.
  • Before you invest, do your homework, because you can lose money even on legitimate investments.
  • Get the details of all deals in writing.
  • If it sounds too good to be true, it probably is.

Consumers who believe they are victims of these types of fraud should contact the Federal Trade Commission (www.ftccomplaintassistant.gov) and their state attorney general.

On its website, www.consumer-action.org, Consumer Action offers many free multilingual publications on how to protect yourself from frauds and scams. Click here for our publications on fraud. Click here for our fraud alerts.

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Consumer Action empowers low to moderate income and limited-English-speaking consumers nationwide to financially prosper through education and advocacy.




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