Your Legal Rights: Beware of Internet classified scams
While the Internet may offer convenience, it can also enable scam operators to defraud buyers and sellers. Fraudsters can use cheap technology and free classified services on advertisement websites such as craigslist.com or Ebay.com to dupe individuals looking to buy or sell items such as furniture, cars, ATVs, boats, or other merchandise, or those looking to rent an apartment. Don't let this happen to you.
Most Internet classified scams are predicated on convincing a victim to send money to someone who is not who they pretend to be, often through a money wiring, escrow, or Internet payment service. Many perpetrators of Internet scams operate in countries outside of the United States, complicating law enforcement actions and attempts to retrieve money. Citizens who are asked to wire or otherwise submit payment to a party in another country who they do not know should exercise great caution, as this is a primary red flag for potential Internet classified scams.
Internet Buyer Scam. In the Internet buyer scam, a potential buyer expresses interest in an item posted for sale at an online classified site, such as craigslist.com or Ebay.com. The buyer is then typically contacted--often by e-mail--by the supposed "seller" (or in some cases, a party claiming to represent the seller as an escrow agent), who asks the buyer to submit payment. Oftentimes the "seller" asks the buyer to send payment through an Internet pay service such as PayPal, or other pay services purported to be offered by Ebay.com or Google.com. The information that the "seller" provides for these pay services is fraudulent, and may be doctored with official-looking logos, trademarks, and seals to make it appear legitimate. Scammers use cheap technology and copying ability to recreate look-alike websites and pay systems that mask the true nature of the fraud, so that the buyer is unaware that he or she is not actually on PayPal or other well-known Internet payment sites. In other cases, the scam "seller" may ask the buyer to send the payment via money wire. Once the payment is made, the "seller" disappears and the item is never delivered.
"Adam" wants to buy a used vehicle online, and responds to an advertisement on craigslist.com to purchase a truck. The supposed "seller" contacts him and suggests that they process the sale through what he claims is "E-Bay Motors." "Adam" subsequently receives an e-mail containing a fake replica of E-Bay's trademark seal and copyright information, with directions to wire $9,000 to an "E-Bay holding account." He completes what he believes to be his end of a legitimate transaction. The "seller" does not transfer the truck to "Adam," however, and after a time, ceases contact with him, leaving him out the money, and with no truck.
Internet Seller Scam. The Internet seller scam is a type of Advance Fee Scam, a form of fraud that has been around for many years. The scam artist capitalizes on advancements in cheap technology, which allows the scam artist to buy a printer, ink, and paper and create very authentic-looking counterfeit checks (oftentimes cashier's checks or money orders) at low cost. The scam artist then contacts people who have an item for sale on the Internet, or who are renting an apartment or looking for a job on the Internet. The scam artist uses various appeals to persuade the victim to deposit the fraudulent check in the citizen's bank account and wire the "overpayment" to the supposed buyer or a third person. Typically, the scam artists may suggest that the "overpayment" is meant to cover shipping costs or other fees, or perhaps to cover the fees of a third-party "agent" hired to transfer the property or assist in the transaction in some other way. By the time the counterfeit check bounces, the victim's money has already been wired to the scam artist.
FAKE CASHIER'S CHECKS AND MONEY ORDERS
It has long been ingrained in us that cashier's checks and money orders are more secure than other forms of payment and that their funds are somehow guaranteed. This is not the case if the document is fake! A check is not worth the paper it's printed on until the bank it was issued from releases the money. Federal rules require banks to make deposits "available" to consumers quickly, often the following business day. A check takes considerably longer to clear the bank it was issued from, however, before the funds can be "collected" by your financial institution. It may take a bank weeks to discover that the deposited check was fraudulent! The bottom line is that while the funds may be available in your account within days of your deposit, the check may take weeks to clear, or bounce. Scam artists prey on those who mistakenly believe that once the funds are available, the check is legitimate. Furthermore, once a victim wires funds onward from such a check, he or she may be liable to the bank for the amount wired. Typically the bank will not cover the loss, and expects the victim to pay the difference.
Scamming Businesses. Another variation of the scam targets small businesses. After making contact with a small business to request its services or products, the scam artist will send a fake cashier's check or money order for an amount over the agreed-upon price. The scam artist will then claim that the check was actually meant for another business and that he or she should cash the check and wire the difference directly to the other business. These requests will often be accompanied by stories designed to evoke sympathy.
Consumer Tips To Avoid Internet Classified Scams
1. Beware of Internet payment services that you are asked to access through a link or in the body of an e-mail. Remember that links can be masked, and logos and trademarks can be faked online. If you intend to use what you believe is a well-known Internet payment service, visit that company's website yourself, rather than trust the information that another party is suggesting.
2. Don't be rushed. If someone really wants to do business with you, they will wait until you are ready to make a legitimate transaction. Furthermore, if an individual wishes to make changes to the terms of the transaction, such as where and how the payment is sent, do not let your eagerness to complete the transaction blind you to potential problems.
3. Be wary of wiring money to a party that you don't know. Many people mistakenly think that wire transfers, like personal checks, can be canceled at anytime. This is not true. If you wire money via Western Union or MoneyGram, it's impossible to retrieve the money once it's picked up at the other end. Because it can be picked up anywhere in the world, the money is virtually untraceable. Once money is wired overseas, United States law enforcement agencies may have little recourse in recovering lost funds.
4. Cashier's checks are not the same as cash. Just because the money appears to be available in your account doesn't mean that the check has cleared and is legitimate. Counterfeit cashier's checks can look very authentic. The bank may still bounce the check if it's a forgery! If you do receive a check, attempt to locate the source of the check and verify its legitimacy by contacting the issuing bank. Do not use the contact information that appears on the check. Do a little leg work and obtain the contact information independently through legitimate directories.
5. Always be wary of someone who wants to pay more than your asking price or who wants to sell you an item at an unbelievably low price. A deal that sounds too good to be true probably is.
6. Be wary of "third parties" or "agents." If a third party is actually owed any money, their client should be making the payment, not you. Do not wire money to a third party.