For Immediate Release
DURING NATIONAL CONSUMER WEEK, MADIGAN URGES CONSUMERS TO ‘READ UP AND REACH OUT’, HIGHLIGHTS TIPS TO AVOID COUNTERFEIT CASHIER CHECK SCAMS THAT ARE ON THE RISE
Chicago - In recognition of National Consumer Protection Week, Attorney General Lisa Madigan today reminded Illinoisans that her agency offers a wealth of informational materials to help consumers make wise spending choices and avoid rip-offs. Madigan is using the week-long national education campaign, themed “Read up and Reach Out: Be an Informed Consumer,” to highlight the warning signs of one especially devastating form of consumer fraud—the counterfeit cashier’s check scam.
National Consumer Protection Week comes on the heels of the publication of the Attorney General’s Top 10 Consumer Complaint list for 2006. Madigan noted that her office’s Web site contains educational materials addressing problems represented on this year’s Top 10 list. “Prevention is key,” she observed. “By arming themselves with the practical information available to them, consumers can avoid becoming a statistic on next year’s list.”
Madigan also urged Illinoisans to educate themselves about a common scam that, while not on this year’s list, impacts many Illinoisans every year and leaves its victims financially strapped. Last year, Madigan’s office received 290 complaints concerning counterfeit cashier check scams. In 2007, 59 complaints have been received just for the month of January. The National Consumers League reports that fake check scams are #1 in their telemarketing category, up from #5 in 2005.
According to Madigan, forty-two percent of the consumers who called her office in 2006 to report counterfeit cashier check complaints had recently cashed the checks and wired the money, with an average loss of $3,700 per victim. Madigan noted that in the most egregious case, the victim lost more than $21,000. The victims wired money to locations such as Canada, Nigeria, England and New Zealand.
In counterfeit cashier check scams, victims receive a realistic-looking phony check and do not discover it’s fake until after depositing it and wiring money back to the thief. As a result, victims can be left legally liable to their banks for thousands of dollars. The scammers use high quality printers and scanners to make the checks look real. Some of the checks contain authentic-looking watermarks. These counterfeit checks are printed with the names and addresses of legitimate financial institutions. Even if the bank account and routing numbers listed on a counterfeit check are real, the check still may be fake.
Consumers can receive these counterfeit cashier’s checks in a number of ways, Madigan said. Some consumers receive the checks in the mail with a notice informing them they have won an overseas lottery and instructing them to wire back a portion of their “winnings” for taxes or fees. The letter might say “Spanish Sweepstakes Lottery Award Notification Final Notice: We are pleased to inform you have been approved for a lump sum pay out of $1,231,620.00”.
Others receive fake checks as payments for items they have sold over the Internet. In these cases, the checks are written in an amount in excess of the item’s selling price, and the consumer is asked to return the “overpayment” by wire—typically, to an overseas address.
Madigan observed that the so-called Nigerian Letter scam continues to be a popular form of fake check fraud. Although this scam has many permutations, Madigan noted that it almost always begins when a con artist asks the consumer—by mail, e-mail, phone, or fax—to help him or her move a large amount of cash out of a foreign country.
If consumers take the bait, they then receive an authentic-looking phony check in the mail with instructions to deposit it and wire a large portion of the funds to an overseas address. If the consumers do as instructed, they can be liable to the bank for all of the money they wired overseas in addition to any of the proceeds they have already spent.
Madigan stressed that no matter how the fake check scam is pitched to the consumer, the bottom line is the same. “Whether you’re being offered a ‘lottery jackpot,’ an overpayment for something you’re selling, or the opportunity to help ‘deposed royalty’ transfer the family fortune to another country,” Madigan cautioned, “if someone is sending you a check and asking you to wire some portion of it back, you are being set up for trouble.”
Madigan said that many fake check scam victims mistakenly believe that a check must be good if their bank accepts the check for deposit and makes the funds available to them. Banks are required by federal law to make funds from a check available to consumers within a relatively short period of time. However, Madigan noted, “making the funds available to you is not the same as confirming that the check is authentic. It takes days, even a week or more, for a bank to determine that a check is a forgery.”
Madigan offered the following tips to help consumers avoid falling victim to counterfeit cashier check scams:
In addition to alerting consumers to counterfeit check scams, Madigan also urged consumers to make use of the information her office provides about issues on this year’s Top Ten list. For the first time in the Top 10 list’s history, identity theft complaints claimed the number one spot. Of the 32,724 consumer complaints filed in 2006 with the Attorney General’s Consumer Protection Division, 5,237, or 16 percent, concerned identity theft. Madigan noted that many of the calls to her office’s Identity Theft Hotline came from consumers seeking guidance on how to avoid becoming victims of ID theft.
“When consumers lose a wallet or receive a security breach notice in the mail,” said Madigan, “they can reach out to my office and learn the steps they should take to prevent their personal information from being misused if it should fall into the wrong hands.”
The Top 10 consumer complaints for 2006 are:
To reach out and read up on more information about fake check scams and a wide range of consumer issues, consumers can visit Madigan’s website at www.illinoisattorneygeneral.gov or call one of the Consumer Fraud Hotlines or the Identity Theft Hotline at the numbers listed below.
Chicago Consumer Fraud Hotline: 1-800-386-5438 and 1-800-964-3013 (TTY)
Springfield Consumer Fraud Hotline: 1-800-243-0618 and 1-877-844-5461 (TTY)
Carbondale Consumer Fraud Hotline: 1-800-243-0607 and 1-877-675-9339 (TTY)
Spanish Language Hotline: 1-866-310-8398Identity Theft Hotline: 1-866-999-5630 and 1-877-844-5461 (TTY)