Fake-check crooks bank on ignorance

At first, Los Angeles resident Wanita Holmes thought it was her lucky day.

“You are hereby selected to participate in a paid Consumer Research Program in your area of residence as a ‘Mystery Shopper,’ ” the letter began, adding that the assignment could turn into a full-time gig “for a selected few who are able to distinguish themselves in the course of this program.”

Enclosed was a check for $3,950, to be used to buy things at well-known merchants such as Wal-Mart and to test “the effectiveness and efficiency” of money-transfer services such as Western Union and MoneyGram.

“What did I do to deserve this?” a delighted Holmes, 80, asked herself.


The more she thought about it, though, the more she grew suspicious. The check certainly looked real. But she’d never heard of the company sending it to her -- Index Research Program Inc. -- and had no idea why she’d been selected to participate.

Holmes was right to be wary. This is an unusually sophisticated version of a classic scam to dupe people into wiring their money to con artists, often based in Canada.

According to the Federal Trade Commission, fraud losses involving U.S. consumers and Canadian entities totaled $55 million last year.

Steve Baker, an FTC spokesman, said authorities had seen a big increase in fake-check scams in recent months. “It’s really exploded,” he said.


Baker said one reason more people were being victimized by these scams was because the checks were virtually impossible to spot as counterfeit.

“The checks have brought a whole new dimension to this,” he said. “It’s very hard for people to know that this isn’t real.”

In Holmes’ case, the letter she received instructed her to cash the $3,950 check and to use $100 for a purchase at a leading retailer. It told her to test a money-transfer service by wiring $3,350 to one of Index Research Program’s “training agents” and to use $200 to cover any service charges.

The remaining $300 would be Holmes’ to keep as “probation training pay.”

The letter was accompanied by a form that Holmes would fill out detailing her shopping experiences and including all necessary information for the wired funds to be received by the company. A working fax number was provided.

Baker said the fake-check scam was particularly effective because federal regulations require banks to credit a depositor’s account within a few days of a check being cashed. When the money shows up in their account, many people conclude the check is legitimate.

A week or longer might pass before bank officials determine that the check is actually fraudulent and demand the money back. That means if you’ve spent any of that money, or transferred it abroad, you’re on the hook for the funds.

Another common ploy, Baker said, is for scammers to use an actual bank account -- belonging to someone else -- to make the check seem even more genuine.


The check Holmes received was drawn on a business account at Citizens Bank in Rhode Island. Krista Campbell, a bank spokeswoman, said the check had an actual routing number and an actual account number, belonging to Thelma’s Cafe in Tyrone, Pa.

“It’s a legitimate account,” she said.

Tim Wahl, the owner of Thelma’s Cafe, said he had no idea how the scammer got his checking account number. He said he received the first call about a bogus check about two months ago.

“Since then, I’ve gotten four or five calls from California, calls from Tennessee, Mississippi, Georgia, Alabama, Florida, both Carolinas,” Wahl said.

He said he closed the checking account as soon as the problem started. But banks cashing the phony checks usually don’t find this out until it’s too late.

“I’d like to have about five minutes with whoever is responsible for this,” Wahl grumbled.

The letter Holmes received included a nonexistent Colorado street address and a non-working phone number with a Vancouver area code. The envelope had a Canadian stamp and postmark.

One reason that fraud is easy to perpetrate from elsewhere is that money transfers from the U.S. can be picked up at any Western Union or MoneyGram outlet in a country. Until recently, most such transfers could be received anywhere in the world.


Another problem, the FTC’s Baker said, is that it can be a challenge to persuade Canadian authorities to focus limited law enforcement resources on crimes being perpetrated south of the border.

“Even if you catch any of these people,” he said, “extraditing them from Canada is a very difficult process.”

Basically, it’s up to consumers to protect themselves.

Minneapolis resident Shawn Mosch, 37, and her husband fell for a different version of the fake-check scam in 2002, resulting in a loss of $7,200. This experience led them to create a website, Scam Victims United (www.scam, where people can share their mishaps and findings.

Contributors to the site have reported receiving nearly identical letters to the one that Holmes got, with only the name of the “Mystery Shopper” company changed.

“This is one of the top scams we’re seeing right now,” Mosch said.

Her advice? Don’t accept any job that doesn’t include a face-to-face interview with your employer. And give any checks received ample time to be deemed legitimate before transferring any cash.

Better still, if you don’t know the sender or the circumstances are unusual, be suspicious of any check you get in the mail.

And for goodness sake, don’t wire money to strangers. Not unless you want to make someone’s day in the Great White North.


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