Consumer Groups Fight Fake Check Scams

It's an old scam that's changed in the face of technology.  But the object is still the same: to get you to part with your hard earned money.  Recently, a number of national and state consumer groups joined forces in a new effort to educate people about fake checks.

The Consumer Federation of America (CFA), the Georgia Bankers Association, and Georgia Credit Union Affiliates announced a new program to protect consumers and financial institutions from fake check scams. Officials say participating banks and credit unions will hand out a brochure created by CFA, "Don't Become a Target," to every consumer who comes in to deposit checks or money orders of $1,000 or more or to withdraw $1,000 or more.   http://d1.scribdassets.com/ScribdViewer.swf?document_id=39125148&access_key=key-2o4l2ehnbduz60g8ry0z&page=1&viewMode=list

Nearly 60 banks and credit unions in Georgia have signed up to participate.  "The key is to prevent consumers from being victimized by educating them about these scams at the very point where they may be at risk," said Susan Grant, CFA's Director of Consumer Protection, who is coordinating the program.

In fake check scams, the person always receives a genuine-looking check or money order for something and is asked to wire money somewhere in return. Sometimes you may be told you need to pay taxes on a "prize" or you're going to be a "mystery shopper" or you're going to process payments for a company.  But the experts say  - No matter the story, the check or money order is phony, and when it bounces, the victim owes the money back to the financial institution where it was deposited or cashed. The average loss is $3,000 to $4,000. Experts also say it often is impossible to detect counterfeits just by looking at them.

The basic message - there's no legitimate reason why anyone would send you money out of the blue and then ask would you to send them money somewhere in return. Experts say " If that's the deal, it's a scam."

They also say it's important for people to understand that just because a check initially clears at the bank, doesn't automatically guarantee the check IS REAL.  Federal law gives consumers the right to access their funds quickly, usually within a day or two. But because it can sometimes take up to a week for the financial institution to get the check back to the person or company that supposedly issued it.  "These crooks take advantage of the trust that the financial system is built on," said Joe Brannen, president and CEO of the Georgia Bankers Association.  "This campaign is a service to help consumers understand they are responsible for the checks and money orders they deposit or cash because they are in the best position to know if the people who gave it to them are trustworthy."

"Fake check scams are a serious problem for consumers. Credit unions want to do all they can to educate their members. That's why we're excited to be a partner in this consumer education program," says Cindy Connelly, senior vice president of association services for Georgia Credit Union Affiliates "Consumers and credit union personnel need to be able to recognize the warning signs of fraud in order to prevent it."        

Georgia is one of several states in which CFA will be conducting this project to fight fake check scams over the next several months.