MORRISON WARNS MONTANANS TO BEWARE OF NEW PHONY CHECK SCAMS TARGETING STATE
Surge of recent fake check activity surfacing in Montana; Swindlers looking for your good money in exchange for their bad check
State Auditor John Morrison today issued a warning to Montanans to be on the lookout for new scams targeting the state. People across Montana are receiving fake checks in the amount of $3,500 along with award claim notifications instructing them to cash the check and in turn, send a $2,900 payment via Money Gram or Western Union to cover the cost of taxes and insurance.
“In recent weeks, we have seen a surge of fake check activity in the state,” said Morrison. “These scams are called check overpayment or fake check scams and they come in many different guises. If someone you don’t know wants to give you a check but wants you to wire some of the money back, beware -- it’s a scam that could cost you thousands of dollars. Basically, scammers are looking for your good money in exchange for their bad check.”
In this scam, Montanans are being notified that they won a drawing through a computerized ballot system drawn from a pool of 33,706,009 names based on debit, credit and charge card use during the holiday season. The letters claim to be from either MGD Claims Centre or MPC Midland Payment Centre in Sacramento, California and they inform recipients that they won a lump sum of anywhere from $65,000 to $125,000. Phone numbers listed on the notification letters indicate that the scam is actually being perpetrated out of Canada. The letters include a fake check in the amount of $3,500 drawn on a bogus bank account with Home Federal Bank of Tennessee in Seviverville, Tennessee. The letter instructs the recipient to deposit the check, purchase a $2,900 money order and send the money order back to them. Upon receipt of the $2,900 money order, the Claims Director promises to release the winning prize funds. Although the Home Federal Bank of Tennessee is a legitimate financial institution, the account is bogus.
“The checks look absolutely convincing,” said Morrison. “In fact, in this case, the checks are official – but they’re drawn on a bogus bank account. Anyone can order official check blanks online complete with all the security features including the trademarked Padlock symbol which is a certification mark of the Check Payment Systems Association. Those security features are meaningless in these cases.”
Under Federal law, banks must make deposited funds available quickly—usually within one to five business days. However, it may take weeks for the forgeries to be discovered. By the time the check bounces, the victims have often accessed their funds, and are therefore liable to repay the bank the money they withdrew against the bad check. When the check or money order bounces, the bank deducts the amount that was originally credited to their accounts. If the funds are insufficient, the bank has no choice but to recover the funds from the victim.
“In our ongoing efforts to caution Montanans about these scams, we have posted on our website an example of these fake checks as well as the phony ‘congratulations’ letter notifying victims they won,” said Morrison. “Remember, there is no legitimate reason for someone who is giving you money to ask you to send money back. If a stranger wants to send you a check, insist on a cashier’s check for the exact amount, preferably from a local bank or one with a branch in your area.”
In another twist on prize scams, con artists are trying to gain access to people’s banking information in order to gain access to their hard earned cash. Recently, Montanans have received notifications claiming to be from Yellow Pages stating that they have won $50,000 in the Yellow Pages 21st Century Sweepstakes bonanza. Included in the notification is a $2,500 check drawn on a phony account with Fifth Third Bank in Lexington, Kentucky. Scammers are asking people to provide their bank name, routing number and account number in order to claim the prize and receive the funds. “This scam goes one step further. In addition to asking the prize recipient to send good money in exchange for a bad check drawn on a bogus account, scammers are asking them to release their critical bank account information. Montanans need to have their guard up at all times when it comes to their finances,” said Morrison.
Montanans that suspect a fake check scam are urged to contact the investigations unit of the State Auditor’s Office at 1-800-332-6148 or the Federal Trade Commission at 1-877-FTC-HELP (1-877-382-4357) or www.ftc.gov. A sample fake check can be viewed at: http://www.sao.mt.gov/fake check.asp.