How does the scam work?
The scam usually occurs when you are selling merchandise or chatting online. However, other variations of the scam include:
- Receiving overpayment for an item you placed for sale on the Internet
- Receiving notice that you have won a foreign lottery or sweepstakes
- Promise of receiving a percentage of money for transferring funds to your own bank account for safekeeping, usually from outside the USA
- Notice of receiving an inheritance from a recently deceased, distant relative, and you did not know this person or of his/her death
- Receiving unsolicited emails, faxes or letters requesting an immediate response
- Being asked to cash a check/money order or to allow transfer of funds to your account, and then offered to keep a percentage of the funds
Regardless of how this is presented to you, all scams involve you being contacted by individuals who state that they will forward a check to you. After the check is deposited, you may be contacted and possibly told an elaborate story, which leads to a request that you wire transfer back all or some of the money. After you withdraw or wire the money from your account, the item you deposited is returned to the bank because it is counterfeit. At that point, the full amount of the check will be deducted from your account.
Who is responsible if there is a loss to my account?
As always, you are responsible for the check(s) and money order(s) you deposit into your account. Only you can determine if the transactions are truly reasonable and legitimate. Please be careful of any arrangements for funds to be sent to you, especially when you do not really know the other party. If a check or money order is counterfeit or is returned unpaid for any reason, you are fully responsible for any loss that may be incurred. In most cases, the bank can subsequently charge your account(s) to recover the funds. If there are insufficient funds, you are responsible for covering the repayment to the bank. This may result in collection or litigation activities. Please refer to the Citibank Client Manual for more information.
Why did the bank allow me to withdraw the money?
Federal law requires banks to make deposited funds available to you, usually within 1 to 5 business days. The fact you can withdraw cash from your account shortly after depositing a check or money order does not necessarily mean the item you deposited will be paid by the maker's bank. Counterfeit checks and money orders can sometimes take weeks to be discovered and returned to your bank unpaid.
Is it possible for the bank to determine if the check is good or bad?
Bank employees cannot always determine if a personal check, a cashier's check or money order, including the maker's endorsement, is valid or counterfeit. Today's technology helps the fraudster produce counterfeit items that look legitimate. That is why you need to 'know' who is giving you the items and that the transaction is reasonable.