Posts Tagged: ‘provisional credit scam’

Scam of the day – January 2, 2013 – Phony sweepstakes and contests

January 2, 2013 Posted by Steven Weisman, Esq.

January is a big month for phony sweepstakes and contests although, quite frankly, every month is a big month for such scams, however, January leads the way because many legitimate sweepstakes and contests declare their winners in January.  Often the scam starts when you receive an email or a regular mail communication congratulating you on having won a contest or sweepstakes that you never even entered.  You may next be told that you are required to provide some personal information, such as your Social Security number in order to claim your prize, or you are told that you have to pay the sweepstakes sponsor income taxes on your winnings or you are required to pay some administrative fees in order to claim your prize or perhaps, you even receive a bank check that is the first installment of your winnings; you are then told to deposit the check and pay taxes or administrative fees back to the sweepstakes sponsor from the first check.  In all of these scenarios, you are in serious jeopardy of identity theft or being scammed out of your own money.

TIPS

The first thing to remember is that you never win a contest you did not enter.  That, right away, should be enough for you to recognize that the contest is a scam.  Many of these phony lotteries appear to be foreign.  Participating in foreign lotteries is a violation of federal law and, again, the chances are pretty substantial that you are hearing from a domestic or foreign scam artist, not from a legitimate foreign contest sponsor.  If you provide your personal information, such as your Social Security number to the scammer, you will end up a victim of identity theft.  It is true that lottery winnings are subject to income tax, but the sponsor of a legitimate contest either deducts the taxes from your winning directly  before you receive your money or,  most commonly, they give you your winnings and it is your responsibility to pay the income taxes.  They don’t collect income tax payments from you on behalf of the IRS.   As for that legitimate looking bank check that you might receive, it is a forgery.  Federal law requires banks to give provisional credit to cashier’s checks or other forms of bank checks by the next business day after the check has been deposited.  However, this credit to the depositor’s account is merely provisional and when the check eventually bounces, which may take weeks, the victim loses the credit for the money he thought he was depositing into his account as well as the money that he paid from his own bank account to the scammers.  Most people don’t know what provisional credit is so when it appears to them that the deposited check has “cleared” they think they are safe when they most assuredly are not.  If you want to investigate a check’s legitimacy, contact the bank that it appears to be written from and inquire as to whether it is legitimate.  You will find that it is not.

Scam of the day – September 28, 2012 – Mystery shopper update

September 28, 2012 Posted by Steven Weisman, Esq.

A tried and true scam that continues to effectively steal unsuspecting victims’ money is the mystery shopper scam.  Part of the problem is that there are legitimate mystery shopper companies that hire people to do market research for major companies by shopping in their stores and reporting on the experience.  Unfortunately, the real mystery shopper jobs are few and far between while the scams are everywhere.  The manner in which the scam works is that when you answer an  advertisement or an email to be a mystery shopper, you are sent a bank check for you to deposit and use for your shopping.  You spend some of the money on the goods that you purchase which you are allowed to keep and also are able to keep more of the check as the payment for your services and then you return the balance.  The problem is that the check is counterfeit, but the money you send by wire from your own bank account is legitimate and you lose that money.

TIPS

The New York Attorney General has recently shut down two mystery shopper websites, Idealcorp.net and Suvsonl.com.  Real mystery shopper companies will not seek you out by email.  People often are fooled when they deposit the real looking check and wait for it to clear in a few days only to learn too late that the check did not clear, but that they had only received provisional credit which makes your account look like it has money in it when it really does not and once the check fails to clear, the provisional credit is removed and your account is out the money that you sent thinking the check was good.  Also, always be wary of any transaction that requires you to wire the money.  That is a major sign of a scam because the money is impossible to get back after it has been wired.