One of the most popular types of fraud is called an employment scam. There are many different types of variations for this scam, but the most common is when a victim is falsely led to believe they have landed their dream job. After the “employer” hires the victim (with no legal documents signed) they send the victim a counterfeit cashier’s check stating they are going to pay for the equipment that they will need for the job. They then later claim they over paid and demand that the excess funds are returned. They give the victim a fake account number and instruct them to send the funds electronically via a money transferring service. If the victim falls for the tricks, and sends the funds, they will most likely never see those funds again. This nightmare becomes reality when the check bounces and the victim is left with the bill. Once the check bounces, the victim owes the money back to the financial institution. Often times the victims are truly looking for a job and are already worried about money, so this just compounds the issue.
For the institutions’ fraud departments, these scams are very difficult to detect. It is a constant search for the needle in the haystack. Try to imagine how many checks are deposited into any financial institution in just one day. Scam checks are not always easily caught by the institutions’ fraud departments, and once the victim sends the funds to the scammer, there’s nothing that can be done to recover the funds other than hope that the money transferring service’s fraud prevention department is also monitoring and looking for red flags before any fraud is completed.
There are a few things we can do that can greatly decrease this type of fraud:
- Consumers can educate and protect themselves by being aware of popular fraud schemes. (Even by subscribing to this blog!)
- Financial Institutions can take the time to educate their members on the many different types of fraud schemes and how to avoid being scammed.
- Fraud prevention departments can continue to utilize all available tools and resources to detect the fraud as early as possible and ultimately help prevent the victim from taking a loss before any money is sent back to the fraudster.
- The money transfer services should also be alert and utilize fraud prevention tools to keep fraudulent accounts from being opened, to watch for fraudulent patterns and activity, and they should take action to stop things before it happens.
Everyone plays a part in the fraud prevention process. If there are any weaknesses, at any point, the fraudster will find them and exploit them. Please read more on this topic at the link below.