There’s another check cashing scam making its way around Covington, and local resident James Johnson wants people to avoid falling for the scam.
Johnson’s wife received a real check in the amount of $3,875 from AMG Resources, a Pittsburgh-based scrap metal company, but the accompanying letter is actually from World Financial Group, a financial services company that offers investment and money management advice. The companies are both legitimate companies, but don’t appear to be related in any way and the letter never mentions AMG Resources.
The letter claims that the recipient has won $125,000 in a special, random drawing for a program that it says is sponsored by Walmart, K-mart, HSBC, Costco, Sears, Home Depot and many other companies.
The letter then gives the recipient a claim number and says the initial $3,875 check is for the purpose of allowing the winner to pay taxes. The letter requests the person pay $1,875 in taxes “directly to the tax agent.”
The letter also tells the person not to use the check until they call a phone number listed on the letter.
Johnson said he called the number and the people wanted him to deposit the check right away; however, they said he had to take to his bank and were adamant he not take it to a check-cashing business.
He said they told him there would be a 24-hour hold on his check. That’s where the scam comes in. There is a hold on the payment to the recipient, but the recipient needs to wire the $1,875 to the scammers immediately. Sadly, the promised money never makes it to the supposed prize recipient, while the scam artist gets away with the $1,875.
There are several Internet posts referencing this exact scam dating back multiple years. The scam is especially tricky because all of the businesses mentioned are legitimate businesses.
According to a 2009 article by the Better Business Bureau, scams involving fake checks come in many different forms and can be very hard to identify as the printing technology used by scammers improves.
“According to a recent survey by the Consumer Federation of America, nearly one-third of adults have been approached by a scammer trying to pass off fake checks, and at least 1.3 million people have become victim of the scam with an average loss of $3,000 to $4,000,” the article states.
“It can be practically impossible to tell a fake check from a real one using only the naked eye because fake checks can be printed in full color and even include watermarks,” Steve Cox, BBB spokesperson said in the article at bbb.org. “Many check scams plaguing consumers in the U.S. are the work of scammers operating outside of the country and originate in Canada, Jamaica and Africa which makes it extremely difficult for law enforcement to track them down and bring them to justice.”
“Scams involving fake checks typically require the victim to deposit a check into their bank account then wire money back to the scammers. While the check may initially be deposited into the victim’s bank account—leading to a false sense of security—the fake check will ultimately be discovered within a couple weeks and the bank will take the funds out of the account. The victim of the scam is out whatever money they sent to the scammers and will be responsible for paying the bank back if their account is overdrawn,” the article states.
The article said that a Nebraska woman lost $58,000 in 2009 after being told she’d won $11 million in the Jamaica Lottery.