Cheque | Senior Money Memos

The Cheque Over-Payment Scam is the main topic in the Canadian Banking Association Fraud Prevention Tip monthly newsletter just received. Their Safeguarding Your Money web page has an e-mail link by which you can subscribe to the newsletter.

The cheque over-payment scam is also known as advanced payment fraud. The scam usually begins with a letter or e-mail asking for assistance cashing a cheque. The details behind the request may vary – some scammers may ask for help securing an unclaimed inheritance, others may name you a winner in a lottery you don’t remember entering or they may offer to buy something you are selling online or through a newspaper ad.

Regardless of the details, all will send a cheque, all will ask you to cash it in your own bank account, all will request a certain portion of the money be returned to the sender, and all will offer to let you keep the difference for your trouble.

An Australian government website details how the scam proceeds.

The scammer will invent an excuse for the overpayment. For example, the scammer might tell you that the extra money is meant to cover the fees of an agent or extra shipping costs. The scammer might just say that it was a mistake they made when they wrote the cheque.

The scammer will then ask you to refund the excess amount—usually through an online banking transfer or a wire transfer (such as Western Union). The scammer is hoping that you will do this before you discover that their cheque has bounced. You will have lost the money you paid into their account, and if you have already sent the item you were selling, you will lose this as well.

The RCMP warns that this scam is very prevalent at the moment:

Numerous complaints have been received recently of counterfeit cheques and the overpayment scam being used to entice sellers on online markets to accept these cheques as payment for items they are selling.

Perhaps the most surprising confirmation of this was an apparently genuine offer to buy tutoring services from me that has just ended as I write this post. Lo and behold the final message from John Hill [j.hill1200@yahoo.com] of London read as follows (typos included)

Hello,
Thanks for your message. I would be more than happy if you can handle Paul, my son, very well for me because is all I have left ever since his mother died four years ago. Payment for the lessons will be made upfront like I told you and will be by Certified Cashier’s Cheque. In view of this I will need you to email me the information required to send the payment as I will not like to send the payment to a wrong location.

I have contacted my business associate that he should make my funds available in payment of some farm equipment I supplied to him. He assured me he would make the payment (Cashier’s cheque) available and send you the cheque. I also want to let you know that the payment is a bit more than the cost for the six month lessons. So please, as soon as you receive the check I will like you to deduct the money that accrues to the cost of lessons and you will assist me to send the rest balance to my cousin. I would have asked my associate to issue two separate checks, one for you and the rest to my cousin but like I told you that my cousin is currently in europe with my son and will not be able to cash a check drawn from Canada bank. The remaining balance will cover the funds for Paul and my cousin’s flight expenses down to Canada, also to cover his living expenses over there and to buy the necessary materials needed for the lessons. I think, I should be able to trust you with the remaining balance? Am also ready to compensate you with additional $100 for the extra services you are doing for me. I will give you the details of my cousin that you will send the balance of the money as soon as you receive the cheque. Here are some of the details I will need for final assurance of the payment to you.

Needless to say that was the end of that attempted cheque over-payment scam.

I’m A Victim Of Check Fraud, Can I Recover The Money? (ukscams.co.uk)

Technorati Tags: cheque, overpayment, scam

Apparently with Cheque Fraud there is a new twist on an old con. It is not sufficient to just hear from your bank that the cheque has cleared before you use any part of the funds.

Most cheque-clearing systems used by North American banks don’t know, with 100% certainty, for months if a cheque is good. That’s because cheques have to physically travel between banks, branches and processing centres to be truly verified. Until the journey between the bank where the cheque is deposited and the paying bank is completed, there is no confirmation that a cheque is legitimate. The depositing bank essentially credits the depositor with the funds while the cheque undergoes the “clearing” process. It can take a long time for a bank to figure out a cheque is fake and conmen rely on those bank lag times in order to pull off their crime.

Jay Stark, Vice-President of the fraud department at the Royal Bank, is quoted as saying that “the customer remains responsible” even if the bank has given the cheque clearance. Apparently the law allows a bank to come after a customer, up to six years later, for a bad cheque. Stark has promised to take up the issue of cheque clearance with the Canadian Bankers Association (CBA) and the Canadian Payments Association (CPA).

If you suspect the source of a cheque, then you are best advised to not even take it to the bank for deposit, since there can be fees involved in the cheque going through the clearing process. Not all phony cheques look phony. There are many horror stories so be warned and be very, very cautious.

The first Google definition for the word ‘check’ is examine so as to determine accuracy, quality, or condition. The very name is encouraging you to do your due diligence on that piece of paper that looks so much like a genuine cheque. Do check it out: it may save you a lot of money.

Technorati Tags: Canadian Bankers Association, Canadian Payments Association, check, cheque, clearance

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