Scam artists use a number of elaborate schemes to get your money, and many involve money transfers through companies like Western Union and MoneyGram. These scammers pressure people to use money transfers so they can get the money before their victims realize they’ve been cheated. Money transfers are virtually the same as sending cash — there are no protections for the sender. Typically, there is no way you can reverse the transaction or trace the money. When you wire money, the recipient can pick it up at one of many locations which make it nearly impossible to identify the recipient or track him down. In some cases, the receiving agents of the money transfer company may be cooperating with a scammer.
Money transfer scams to avoid:
Fake Check Scams
Someone sends you a check with instructions to deposit it and wire some or all the money back. The check is fake, but it may look legitimate and may fool bank tellers. You may get cash before the bank finds out the check is fake. It can take weeks to uncover a fake check. You are responsible for the checks you deposit, so if a check turns out to be fraudulent, you will owe the bank any money you withdrew.
Versions of the fake check scam:
Lotteries and Sweepstakes
You just won a foreign lottery! The letter says so, and a cashier’s check is included. All you have to do is deposit the check and wire money to pay for taxes and fees. Don’t do it. The check is probably fake and you will lose any money you send.
Overpayment Scams
Someone responds to your posting or ad, and offers to use a cashier’s check, personal check or corporate check to pay for the item you’re selling. At the last minute, the “buyer” (or his “agent”) finds a reason to write the check for more than the purchase price. He asks you to deposit the check and wire back the difference. Don’t do it. The check is probably fake. It might fool a bank teller at first, but eventually the check will bounce and you’ll owe money to the bank.
Mystery Shopper Scams
You are hired to be a mystery shopper and evaluate the customer service of a company. You’re given a check to deposit in your personal bank account. You’re told to withdraw cash and wire the money using a certain money transfer service. Often, the instructions say to send the money to a person in Canada or another country outside the U.S. Don’t do it. The check is probably fake and so is the “mystery shopping” job.
Don’t wire money to a person who:
- you never met
- says they are your relative, and they’re having a crisis — but they don’t want you to tell anyone
- says a money transfer is the only form of payment they accept
- asks you to deposit a check and send some of the money back
Other Money Transfer Scams
Family Emergency Scams
You get a call out of the blue from someone who claims to be a member of your family and needs cash for an emergency — to fix a car, get out of jail or leave a foreign country. He begs you to wire money right away and to keep the request confidential. Before you send money, talk with your family. If you feel that you cannot ignore the request, try to verify the caller’s identity by asking personal questions a stranger can’t answer. And keep trying to reach your family to check out the story.
Apartment Rental Scams
Some scammers copy legitimate rental or real estate listings, change the contact information, and place the altered ads on other sites. Others make up listings for places that aren’t for rent or don’t exist, and try to get your attention by offering below-market rent. If you respond to the ads, the scammers ask you to wire an application fee, security deposit or the first month’s rent. It’s never a good idea to send money to someone you haven’t met for an apartment you haven’t seen. If you can’t meet in person, see the apartment, or sign a lease before you pay, keep looking.
Advance Fee Loans
You may be tempted by ads and websites that guarantee loans or credit cards regardless of your credit history. But often, when you apply for the loan or credit card, you find out you must pay a fee in advance. If you have to wire money for the promise of a loan or credit card, you’re probably dealing with a scam artist.
Buying Online
If you are buying something online and the seller says you must use a money transfer to pay, it’s a sign you won’t get the item or a refund. Tell the seller you want to use a credit card, an escrow service or another way to pay. If the seller won’t accept, find another seller.
Paying a Telemarketer
Under the Telemarketing Sales Rule, it’s illegal for a telemarketer to ask you to pay with a cash-to-cash money transfer, like those from MoneyGram and Western Union. If a telemarketer asks you to use one of these payment methods, he’s breaking the law.
If you’ve wired money to a scam artist, call the money transfer company immediately to report the fraud and file a complaint. You can reach the complaint department of MoneyGram at 1-800-MONEYGRAM (1-800-666-3947) or Western Union at 1-800-325-6000. Ask for the money transfer to be reversed. It’s unlikely to happen, but it’s important to ask. Then, file a complaint with the FTC.