Let’s call it the Case of the Clueless Banks. Money order scams have been around for years, yet banks are not taking any of the responsibility for cashing them, or the right steps to protect their customers. Victims lose millions when banks cash fake money orders; banks go after the victims to cover their loses.
If you ever receive a money order or check from a stranger, it is likely counterfeit, so don’t cash it, warns Margot Mohsberg, American Bankers Association spokesperson. “The customer is responsible for the money if a check or money order is determined to be fraudulent, because the customer is the one who knows where the check came from and therefore is best-equipped to know whether it might be fraudulent or not.”
Fraudulent money orders are an industry-wide problem. Customers are not trained to spot fakes; bank tellers are. It is clear that some tellers are not doing their jobs properly by treating counterfeit money orders as cash. A well-trained teller is crucial, because while half of America knows about money order scams, unfortunately, the other half does not. Bank tellers are the last line of defense.
On Oct. 7, Jane Rogers (name changed to protect her identity), an acquaintance of mine, fell victim to a money order scam when she signed up to be a “mystery shopper.” Her first "assignment" was to monitor Western Union (WU) - Get Report . Her instructions, sent via email, unedited, with typos and all:
This e-mail is to notify you about your first assignment. The company has issued out a payment to you for your first assignment which means half your weekly payment of $200 has been issued to you with some funds which you will use in executing this Assignment.
(WU) - Get Report Read and make sure you understand all that is stated below to avoid any mistakes. You should receive money orders from one of our companies tommorow (sic) which is part of your assignment.
You can track it at www.ups.com/us with tracking number J#########6 and it would be delivered to you by ups. Payment was issued to cover the assignment bills and also your weekly wages and Assignment.
(WU) - Get Report ONCE YOU RECEIVE THE MONEY ORDERS YOU SHOULD TAKE IT TO CASH AT YOUR BANK AT ONCE AND CASH THE PAYMENT TODAY THEN DEDUCT $200 AS HALF OF YOUR WEEKLY WAGE. The remaining balance should be used for the below assignment. Follow these instructions below.
As a secret shopper, you are adviced (sic) to Go to the nearest Western Union outlet in your City with cash and $1,500 to the information below and use the remaining $150 for the transfer charges and make sure its (MONEY IN MINUTES).
(WU) - Get Report Rogers was excited, she loves shopping. So on Oct. 14, Rogers went to Wachovia (WB) - Get Report with two crisp, fake, $900 money orders that had been delivered via UPS (UPS) - Get Report as promised. Without question, the teller cashed the phony U.S. Postal Service money orders, deposited $200 into Rogers’ account, and gave her $1,600 cash.
Wachovia says money orders are treated as cash, depending on the client’s account status and whether they have the funds to cover it. Rogers, a retired five-year Army private, living on disability, did not have the funds. The bank could not explain why a teller cashed the money order anyway. Especially since fake postal orders became popular almost five years ago.
(WU) - Get Report (WB) - Get Report (UPS) - Get Report So with all that cash burning a hole in her hands, Rogers marched over to Western Union (WU) - Get Report , gave them a $150 fee, and wired about $1,500 to Doyle Smith in Fayetteville, Ark. She says she was just following orders. But she suspected she was being scammed when her “new boss’ office phone” had been disconnected moments after the transfer.
The next day, Rogers knew it was a scam when UPS delivered four more checks, totaling $3,600. When she didn’t answer her cell phone, her "boss," a man with a thick accent (perpetrators are usually from Africa and Europe, reports say), called her home phone. This con artist has all of her personal information, excluding her Social Security number. Still kicking herself, Rogers is consumed with regret, fear and worry.
(WU) - Get Report (WB) - Get Report (UPS) - Get Report (WU) - Get Report People fall for this scam daily, so what are banks doing about it? Most will allow victims to set up payment plans; others will require that victims pay a certain percentage of the amount. However, it is rare that a bank will assume any part of the debt at all.
(WU) - Get Report (WB) - Get Report (UPS) - Get Report (WU) - Get Report One month later, Rogers is still getting e-mails from crooks to cash fake money orders, but this time of they are for smaller amounts. She also got a letter from the bank, offering a payment arrangement to repay the full amount. I told her to get a lawyer.
(WU) - Get Report (WB) - Get Report (UPS) - Get Report (WU) - Get Report To verify a postal money order, call the Money Order Verification System at (866)459-7822 or visit the U.S. Postal Service Web site. If you suspect fraud, call the U.S. Postal Inspection Service at (877)876-2455.)
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