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Banks and the News FINALLY Acknowledge Fake Check Scams

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The Consumer Federation of America has joined leagues with the Georgia Bankers Association and Georgia Credit Union Affiliates to help protect consumers from fake check scams.

The program will be distributing brochures to banks across Georgia. These brochures will outline various fake check scams and will be given to consumers who try to cash checks over $1,000. You can actually read a copy of the brochure online by clicking here.

Unfortunately, the program only operates in Georgia right now, but man would I love to see this go national.

WTVM in Georgia writes…

“The key is to prevent consumers from being victimized by educating them about these scams at the very point where they may be at risk,” said Susan Grant, CFA’s Director of Consumer Protection, who is coordinating the program. “We’re pleased to have such a great response from financial institutions in Georgia.”

In fake check scams, the consumer receives a genuine-looking check or money order for something and is asked to wire money somewhere in return. For instance, the check may be described as an “advance” on millions that the consumer has won in a sweepstakes or lottery. The consumer is instructed to send money to pay the taxes and claim the rest of the prize.

In another popular scenario, the consumer is recruited to work at home as a “mystery shopper” or processing payments for a company and is instructed to send money somewhere as part of the job. No matter the story, the check or money order is phony, and when it bounces, the victim owes the money back to the financial institution where it was deposited or cashed.

The average loss is $3,000 to $4,000. “It’s impossible to detect these counterfeits just by looking at them,” said Joseph B. Doyle, Administrator of the Governor’s Office of Consumer Affairs. “The message that we want to give consumers is that there is no legitimate reason why anyone who wants to give them money would ask them to send money anywhere in return. If that’s the deal, it’s a scam.”

Federal law gives consumers the right to access their funds quickly, usually within a day or two. But it is often difficult or impossible for the consumer’s financial institution to tell if there is a problem with a check or money order until it goes through the system to the person or company that supposedly issued it.

That can take several days or weeks. “These crooks take advantage of the trust that the financial system is built on,” said Joe Brannen, president and CEO of the Georgia Bankers Association. “This campaign is a service to help consumers understand they are responsible for the checks and money orders they deposit or cash because they are in the best position to know if the people who gave them to them are trustworthy.”

“Fake check scams are a serious problem for consumers. Credit unions want to do all they can to educate their members. That’s why we’re excited to be a partner in this consumer education program,” said Cindy Connelly, senior vice president of association services for Georgia Credit Union Affiliates “Consumers and credit union personnel need to be able to recognize the warning signs of fraud in order to prevent it.”

Read the full story here.

Handing out a brochure to consumers before they deposit checks is a genius idea. The brochure covers nearly every scam I warn about here too. It’s great to see banks taking the initiative to protect consumers.

To me, this is good and bad news. Don’t get me wrong. It’s great that news outlets and banks are finally getting around to warning consumers. However, I’m fairly confident that as fake check scams slowly start to dissolve, something worse will come out of this. This has been the case with all of the past scams I’ve covered. I will be right here though to report whatever comes next of course and hopefully we can fill in the media before another scam has the chance to take off.

And another quick side-rant: if you get a chance, take a look at the ads being served at the bottom of the story on the news website. For me, I see teeth whitening, work at home, and debt consolidation scams being advertised. They’re all negative opt-in scams. Why in God’s name does a news website allow these scammers to advertise? What the hell is going on here?

Thanks to Eddy at WorkAtHomeNoScams.com for the heads up.

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