Classifieds Fraud

steven s · Jun 24, 2015

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http://www.consumeraffairs.com/news...eck-scam-still-snares-new-victims-100314.html

The label “check scam” refers to any type of scam that first requires the victim to mistake a fake check for the real thing. The simplest and oldest form of check scam is to buy goods or services and pay with a bad or fake check, in which case the seller/victim loses the value of whatever good or service was sold. In today's society, the most common victims of that scam tend to be small-business owners, or “direct sales representatives” selling the likes of Avon products from their homes — in other words, the people in today's economy who are most likely to accept checks from people they don't already know.

But most check scams are more complex, and basically take advantage of the “float” – the time it takes for a recently deposited check to actually clear the bank. The scammer will ask you to deposit a check into your account and then send a small portion of the money back to the scammer.
Suppose you have $1,000 in your bank account, and receive a scam check for $500; the scammer asks you to send him $50, and you can keep the rest. So you deposit the $500 check in your account, still having no idea it is fraudulent – maybe the account doesn't exist at all, maybe it's a “real” account that has no money in it, and never will.

Now, your account's “current balance” is $1,500 — that's the combined amount of the $1,000 you definitely have, plus the $500 you might have, if and when the check clears. But your “available balance,” the money actually available for withdrawal, remains only $1,000, and won't increase unless and until that $500 check clears.

You withdraw $50 to send to the scammer, bringing your current and available balances down to $1,450 and $950, respectively — but when your bank finds out there's no money to back up that $500 check, your current and available balances both say $950 – and the $50 you gave the scammer is gone.

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Classifieds Fraud

steven s

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