Hot Summer Scams & Fraud

The hot summer temps haven’t slowed down the scammers and fraudsters. So sit back with a cool drink and see what scams are most popular. It's always a good idea to review the structure of these crimes, even if you're savvy at avoiding fraud and scams.

Sweetheart, friend, or foe?

Common repeat offenders are the sweetheart and new-friend scams, and lately, we've seen this happen too often to CUA members. The first red flag is a new love interest. Usually, one you haven't met in person, an individual that you’ve met online, or from a friend of a friend. The relationship moves quickly, whether it be a romantic one or just a new "best" friend. You'll know if it feels too fast, though it doesn't mean it will go south. It just means to be cautious and rule with your head, not your heart. These scammers target kind, friendly, helpful, and sometimes lonely or depressed individuals. Because they play on emotions, this is sometimes called "friendly fraud."

It seems simple enough when they ask you to deposit a check for them. The "friend" instructs you to send the money or a portion of it back to them or another one of their friends. If an individual deposits these funds into their account, the depositor is responsible for those funds. When the check is returned for insufficient funds or a closed account, the money is debited from the account. It can overdraw the account if the money is no longer there. If you need to deposit for others, work with your financial institution to see how you can confirm the funds or how long you should wait before using the money. The new friend will likely push to have their portion sent to them immediately. If you make the deposit, don't let them pressure you to forward the funds until you are sure the check can't and won't be returned.

Sounds reasonable?

Reasons for needing to funnel the money through your account can sound harmless, such as:

• I just moved, and my new bank won't deposit the funds.
• This check is larger than my bank will negotiate using my account.
• I'm in the hospital.
• I'm stuck out of town waiting on car repairs, and I need money to get my car.
• I owe this individual money. Just forward a portion of the cash/wire/check to my friend and the rest to me/scammer. (Sometimes, the third party is innocent like yourself and doing their own "favor" for the fraudster.)
• A new love interest may throw in that when they receive the money they'll be able to buy a plane ticket so they can meet you in person.

Bottom line

It’s best not to facilitate transactions for others. They should transact their financial business directly through their account. If they don't want to, that's a big red flag, especially if you don't know them well or face-to-face.

Selling Items Online Scams

This one has been popular of late. A seller posts an item to sell online, usually priced at a few hundred to thousands of dollars. The buyer sends a check for more than the purchase price and asks the seller to send the extra funds back to them. When the seller does this, they usually send it back with the sold item. The problem with this scenario is that the original check used to buy the item bounces, is returned to the buyer's financial institution, and taken out of the buyer's account. The seller has now returned the "extra" money from their own funds, AND they no longer have their item. The buyer just got a free item and cash!

Check out these tips for selling items online:

• Use caution; if it seems fishy, it likely is.
• Do not accept payments for amounts other than the agreed selling and shipping price.
• Keep ahold of your item until you can confirm the check will clear. Calling the bank will only guarantee it will clear at that precise time. By the time the check gets there, it may not.
• Never provide your online/mobile app banking information (financial institution, account number, PINs, or passwords) to the buyer for sending funds.
• Don't let emotional transactions, such as selling baby items, puppies, kids' toys, etc., cloud your judgment. Everyone likes children and puppies, but not everyone is trustworthy.

Final Tips

Do your homework and update. CUA has state-of-the-art fraud prevention systems, but if you give out your account information or don’t protect all online accounts, compromises can still happen. To prevent fraudsters from gathering your information, update your e-mail address, online banking passwords, and any other online account passwords you may have. If you're not using an online account, maybe a seasonal streaming subscription, close the account, and don't reuse the password.

Monitor your financial/investment accounts, subscriptions, and shopping accounts. Change the passwords regularly and make them strong passwords. Review your transactions. When system compromises happen from a merchant, fraudsters can wait 1-3 years before using the stolen information. If you've managed and changed your passwords routinely, they'll be out of luck. Working together we can provide the best security for your accounts.

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