The Nigerian Counterfeit Check Fraud:

Ruining lives by the thousands

CONVINCING UNWITTING VICTIMS TO DEPOSIT FORGED CHECKS OR ACCEPT WIRED FUNDS

How to REALLY verify that check

Understand this: the basis of the scam is Money Laundering.  You are laundering money for a gang of criminals.  That means there is ALWAYS money in the account.  Criminals are not going to the trouble of setting you up to launder money from an empty account.

Traditionally, we have been taught that the best way to verify the validity of any check is to call the account holder's bank to see of there is money in the account to cover the check.  That is no longer a reliable method of check verification. Those days are gone forever.

The fact is that the only response the account holder's bank can give you is based on an electronic verification.  This only confirms that the account exists and that there are sufficient funds in that account at the moment of your call.

In this day and age, one must contact the account holder himself.  Only the account holder can provide definitive information as whether or not a check has been issued in your name for the requested product.

Verifying a Money Order

It sometimes happens that these swindlers use Money Orders.  I haven't heard of too many cases, but it does occur.  If you receive a Money Order, contact the Money Order company or the bank listed on the money order and make sure that you explain that you want to verify that the amount and Payee match their records.  Do the same whether the money order was purchased at a market or at a Post Office.

Verifying a Cashier's Check

But what about a Cashier's Check?  Well here's what you do.

Ordinarily one calls the issuing bank.  If this bank is huge, like Bank of America or Wells Fargo, one is put through a series of options on a voice menu.  Again, if you go through the merchant verification routine, only the electronic validity of the check is confirmed.

Skip that.  Go directly to an assistant or whatever the real live person is called on the voice menu.  Ask for the telephone number of the branch on which the Cashier's Check is drawn.  If you are asked why you need to speak to the branch, tell them that you need to get a physical verification of the Cashier's Check you are holding.

Call the branch.  Now you will be able to receive a physical verification of the check you have in hand because a ledger record is kept right there at the branch.  That branch can immediately tell you whether that specific check was written for the amount indicated, and whether or not it was made out to you.

Accepting Wired Funds

Just say NO.  Sometimes the swindlers will wire funds directly to your account.  Under no circumstances whatsoever should you accept funds wired to you by a stranger.  Why?  Because you have no way of verifying the source of those funds.  If you accept those funds, you may find out after it's too late that the source is a forged or counterfeit Cashier's Check.

What smart people are doing ...

It is important to keep in mind that if you do not know the person with whom you are doing business, then be wary until you have a proven track record of dependability. 

Every day merchants are taken to the cleaners by bad checks and stolen credit cards.  It's no different if you are an individual selling your car in the classifieds.

The smart thing to do is have the check verified before even depositing it into your account. Contact the owner of the check, or give the check to your bank telling them you want it physically verified for authenticity.

... and smarter still

Do you know what an escrow account is?  If you don't, here's the explanation of escrow services: https://www.escrow.com/index.asp (Escrow.com)

I'm sending over there so that you will have an absolute understanding of why you should use escrow services whenever you enter into a buying or selling transaction with a complete stranger.  And sometimes with friends and relatives.

An escrow service offers you the protection you need from being taken to the cleaners by swindlers, disagreements on receipt of product, misunderstandings, and all sorts of flies that can turn up in the ointment.

Essentially, you are hiring a licensed and bonded 3rd party to hold the funds until all parties are satisfied with the transaction, at which point the buyer can order the release of his money to the seller.  On the other hand, if the item is to be returned to the seller, the buyer can't access his funds until the seller agrees that he has received the item back in the same condition as it was upon shipment.

Escrow services can be used for large ticket items, or small ones.  It's better to pay for this service (you can include the fees in your product cost) than to find out that you are in a world of hurt because you didn't protect yourself when dealing with a stranger.

Know Your Customer (KYC)

This has become a byword for banks all over the world.  It helps keep banks from unknowingly being used for money laundering and other criminal activities.

Knowing your customer means that you are not merely taking the word of someone about whom you know nothing.  Regardless of the financial transaction, you should never accept as gospel what you are being told.  You MUST protect yourself and your family.

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