Avoiding Money Transfer Scams

You’ve won a prize!
I’m in a foreign country and I need cash.
We’re temporarily unable to accept credit cards.
Your dream apartment is available immediately at an incredible price!
Money transfer scams can involve dramatic or convincing stories that play on your optimistic nature, altruism or thriftiness. According to the Federal Trade Commission (FTC), the nation’s consumer protection agency, money transfers through companies like Western Union and MoneyGram are helpful when you’re sending funds to someone you know, but are risky when dealing with a stranger.
A scammer pressures people to use money transfers so they have the money before their victims realize they’ve been cheated. Typically, transactions aren’t reversible or traceable. Also if money is wired to another country, the recipient can pick it up at multiple locations, making it nearly impossible to identify or track them down.
Here are some examples:

Counterfeit Check Scams

Someone sends a check with instructions to deposit it and wire back some or all of the money. By law, banks must make funds from deposited checks available within days, but uncovering a fake check can take weeks. You are responsible for checks you deposit, so if a check is fraudulent, you will owe the bank any money you withdrew.
Counterfeit check scams have many variations:
Lotteries and Sweepstakes: You just won a foreign lottery! The letter says so and a cashier’s check is included. All you have to do is deposit the check and wire money to pay for taxes and fees. Although the check appears to be a legitimate cashier’s check, eventually the bank will determine it’s a fake. If you deposit the check and wire the money, the check will bounce and you’ll be responsible for the money sent.
Overpayment Scams: Someone responds to your posting or ad and offers to use a cashier’s check, personal check or corporate check to pay for the item you’re selling. Before sending the payment, the buyer comes up with a reason to write the check for more than the purchase price and asks you to wire back the difference. The checks are counterfeit, but are often good enough to fool bank tellers. Acting in good faith, you deposit the check and wire the funds back to the buyer. The check bounces and you’re liable for the amount you wired.
Don’t wire money to:

• Strangers in the United States or anywhere else.
• Someone who says a money transfer is the only form of acceptable payment.
• Someone who asks you to deposit a check and send some of the money back.

Other Money Transfer Scams

Family Emergency Scams: You receive a call out of the blue from someone who claims to be a family member and needs cash to get out of a jam. The caller asks you to wire money right away and keep the request confidential. Check it out with your family first. It’s likely they know nothing about it.
Apartment Rental Scams: Some scammers change the email address or contact information for real rental listings and place the altered ads on other sites. Other scams involve creating listings for places that aren’t for rent or don’t exist. If you inquire about the listing, you’re asked to wire an application fee, security deposit or even first month’s rent. It’s never a good idea to send money to someone you’ve never met for an apartment you haven’t seen. If you can’t meet in person, see the apartment or sign a lease before you pay, keep looking.
If you’ve wired money and believe it’s a scam, call the money transfer company immediately to report the fraud and file a complaint. You can reach the complaint department at MoneyGram by calling 800.MONEYGRAM (800.666.3947) or Western Union at 800.448.1492 and ask for the money transfer to be reversed. While it’s unlikely to be reversed, it’s important to ask. Then file a complaint with the FTC by visiting www.ftc.gov or calling toll-free, 877.FTC.HELP (877.382.4357).