Common Scams and How to Avoid Them

On October 1, 1908, Henry Ford’s Model T went on sale. At that time motorized vehicles had been manufactured for over 20 years; however, they were not affordable or practical for most people. Ford sold his Model T for $850.00. It was higher than most people’s income but was considered affordable. Ford also designed his vehicle to handle different terrains so that it would be more versatile. This helped in expanding the range people could move about the country. A hundred years later, almost everyone has a horseless drawn carriage parked in the driveway.

This leads me to a question people often ask, “What is the most common scam seen at the credit union?” Employment scams make up about 27% of all scams we see. The most common employment scam is the vehicle wrap scam. Other employment scams include secret shopper, personal assistant, and various work from home schemes.

Vehicle Wrap Scam

The vehicle wrap scam is straight forward. The victim is hired to wrap his or her vehicle in an advertisement for a product, such as Diet Dr. Pepper. The scammers send a check to the victim using overnight shipping or as an attachment to an email. The amount of the check will vary but ranges from $1,500.00 up to just under $5,000.00. The fraudster instructs the victim to deposit the check. The victim is to keep his or her pay, typically around $300.00 to $500.00. The remaining funds will be used to pay for the advertisement wrap and installation.

The fraudster will typically instruct the victim to send funds through Western Union or Money Gram or to purchase gift cards. If the victim purchases gift cards, the victim is to supply the fraudster with card numbers. This allows the fraudster to debit the funds from the gift cards. The fraudster may then stop responding to communications from the victim. A few days later the check is returned, and the victim is now left owing the financial institution for the counterfeit check.

Secret Shopper Scam

The secret shopper version of this scam is quite common as well. The victim is hired to work as a secret shopper. The victim will receive a check similarly to a vehicle wrap scam. The victim is told to deduct the amount of their pay. Then they are to go shopping and purchase up to $100.00 in items for himself or herself. The remaining funds may be requested to be withdrawn in cash and send the cash to a fellow secret shopper. Other versions have the victim sending funds via Western Union or Money Gram. The fraudster may request the victim purchase gift cards as part of the evaluation. Once purchased the victim is to provide the scammer with the card numbers.

The following are tips to help identify an employment scam:

• The check is from a business that does not match the name of the employer, or the check is a cashier’s check or official check.
• A check is sent from the employer using overnight or express shipping or a check is sent as an attachment to an email.
• The employer requests the username and password for online banking.
• The employer provides a check for more than your salary.
• The employer requests that you send funds on their behalf.
• If it sounds too good to be true, it is.

Not all financial institutions will verify funds on a check over the phone. You can take the check to the financial institution the check is drawn on, and they can then verify if it is valid or not.

Another way to learn if a check is counterfeit is to ask the trained staff at Radiant to review the check. With the help of our Fraud Prevention Specialist, our staff is trained on how to detect counterfeit checks and determine if a situation is a scam.