Fraudster Double-Dipping

Most of us are familiar with fraud involving automobiles being sold over the Internet. A fraudster will post a nonexistent vehicle for sale on the Internet, typically a luxury or sports car. The details of the vehicle, including photos and description, are typically lifted from legitimate websites. An interested buyer, hopeful for a bargain, responds and is told that the vehicle is located overseas. The fraudster then instructs the victim to send a deposit via wire transfer to initiate the shipping process.

In a new twist to this scam, the fraudster advised there was an issue with the initial wire transfer and sent the victim a cashier's check. The victim was instructed to cash the check and resend a second wire to a different account. Unaware that the check was counterfeit, the victim followed through as instructed by the fraudster. This resulted in the victim getting duped two times and the fraudster accomplishing his "double-dipping" strategy.

Victims should be vigilant when an Internet transaction involves wire transfers and cashier's checks. Most individuals believe that cashier's checks are as good as cash and they clear the day after they are deposited. However, banks are required to make the funds "available" in the individual's account within 48 hours, which can be days before the cashier's check clears or bounces. Once the bank makes the funds available, the counterfeit check circulates to incorrect Federal Reserve locations. Generally, the average cashier’s check takes up to two weeks to clear, not two days. The bottom line: fraudsters understand the U.S. banking system process and capitalize on victims' misconceptions of the term "available funds."

The IC3 has posted multiple alerts warning consumers of various types of counterfeit check scams. The most recent warning was in the IC3 Scam Alert, May 10, 2011, which is available at: http://www.ic3.gov/media/2011/110510.aspx.

To learn more on this scam, prevention tips, and available resources, consumers can visit LooksTooGoodToBeTrue's Types of Fraud page on counterfeit checks at the following link: http://www.lookstoogoodtobetrue.com/fraudtypes/counterfeitcheck.aspx.