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FTC Warns Consumers to Not Fall Victim to Wire Transfer Scams

The Federal Trade Commission (FTC), the nation's consumer protection agency against fraudulent, deceptive, and abusive business practices, has issued a warning to consumers to not fall prey to various money transfer scams that crooks have been using to steal your money.

The scams may start out in a number of ways, but many of them involve asking the consumer to send money by MoneyGram or Western Union, since it is difficult to trace the recipient of the funds and there is no recourse if you learn too late that you've been scammed.

The FTC warns that while these wire transfer services can come in very handy when you need to send quick cash to a trusted friend or loved one, it is not an appropriate way to send funds to someone you don't personally know. Sending a wire transfer is virtually the same as sending cash - the sender has no protections from theft or fraud.

Scammers like to pressure their victims into using money transfer services because it allows them to take the money and run - and oftentimes they can disappear into the night before the victim even realizes they've been scammed. By then it's too late; you typically cannot reverse the charges or trace the money. And the identity of the recipient is often just as fake as the story they told you to get you to send the funds.

The FTC says, "Many money transfer scams involve dramatic or convincing stories that play on your optimistic nature, your altruism or your thriftiness. But no matter how you parse it, they always cost you money."

The "counterfeit check scam" is a common one. The scammer may use one several reasons for sending you a check, then they will ask you to deposit the check into your bank account and send some or all of the money back by wire transfer. The fake check looks like a legitimate cashier's check and, by law, funds will have to made available to you within a few days.

But it may take weeks for the bank to determine that the check is no good - and any funds you've withdrawn will have to be repaid. Meanwhile, if you've already wired funds to the crook, they will be long gone before anyone realizes what happened.

Some variations on the counterfeit check scam:
  • They may send a check and claim you've won a lottery or sweepstakes in another country. They ask you to wire payment for "taxes or fees."
  • They may respond to an ad for an item you're selling and come up with a valid-sounding, last-minute reason for making the check out for more than the purchase price, and ask you to wire the difference back to them.
  • They may "hire" you as a mystery shopper, send a check for you to deposit in your bank account, and ask you to wire money using a certain money transfer service. The instructions often say to send money to someone in Canada or another foreign country.

Other money transfer scams:
  • An online "seller" that insists on a wire transfer as the only acceptable form of payment. This is a big red flag - any legitimate business will expect consumers to be cautious about sending payment and will accept credit cards, PayPal, or another secure method of payment. If the seller insists on a wire transfer, consider it a signal that you won't get the item you purchase - or your money back.
  • Advance-fee loan scams - Ads and websites that guarantee loans or credit cards regardless of your credit history may be tempting. But when you apply for the loan or credit card you find out you have to pay a fee in advance. If you have to wire money for the promise of a loan or credit card, it’s likely you’re dealing with a scam artist.
  • You get a call out of the blue from someone who claims to be a member of your family and needs cash to get out of a jam — 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. Check it out with your family. It’s likely they know nothing about it. If you absolutely, positively cannot ignore the request, try to verify the caller’s identity by asking very personal questions a stranger couldn’t possibly answer. And keep trying to reach the family to check out the story.
Some scammers hijack bona fide rental or real estate listings by changing the email address or other contact information, and placing the altered ads on other sites. Other rip-off artists make up listings for places that aren’t for rent or don’t exist, claiming to offer below-market rent. But once they have your attention, a skilled scammer asks you to wire an application fee, a security deposit or the first month’s rent. Don't send money to someone you’ve never 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.

The FTC says that 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 or Western Union at 1-800-448-1492.

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. Visit or call toll-free, 1-877-FTC-HELP

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Tuesday, 14 July 2020

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