It looks like a real check but has a better shot at quacking like a duck.
Phony cashier’s checks are being mailed to consumers, purporting to be installments for more lucrative prizes from a contest the “winners” never entered.
The dupe hinges on legitimate-looking bank drafts that convince unsuspecting recipients that they’ve hit pay dirt when in reality they’re being set up in a long-running scam that has cost consumers millions.
Consumers are told in an accompanying letter – in one scheme, it’s from the equally legitimate-sounding North American Prize Remittance Board – that the funds are to cover taxes and “clearance fees” needed to acquire a much larger cash prize, which they are told is sponsored by a number of high- profile, recognizable companies. The consumer is typically instructed to deposit the check into his or her bank account and remit the same amount in a check to the sender.
By the time the bank discovers the bogus check, the consumer’s check has cleared, the scammers have made off with their money and the consumer is on the hook for all the money.
“There is no Prize Remittance Board,” said Colorado Assistant Attorney General Jan Zavislan, whose consumer-protection unit helps investigate the cases with the FBI. The phony cashier’s checks “look great because they have some official seal and are fancy. It’s all part of the scam.”
The latest incarnation is a cashier’s check supposedly drawn on an account at Woodforest National Bank, a legitimate institution in Houston with branches in 11 states. It has been the target of counterfeiters since at least 2004.
“It is unbelievable how far they go,” said Loretta Anderson, Woodforest’s vice president of fraud and risk management. “We simply won’t accept a cashier’s check, and our automated system rejects them.”
The checks are not limited to Woodforest. The National Association of Home Builders recently alerted people on its website that its checks were copied and used in a similar scam.
“I don’t think there’s a financial institution in America that hasn’t had their checks counterfeited,” Anderson said.
Federal authorities warn consumers to be alert for the scam, which can recur under a different guise with the same result.
“We see all kinds of variations of these schemes, and they are not new,” FBI spokeswoman Rene VonderHaar said.
Consumers who deposit the fake check – even just to keep it – can be held liable for the amount by their bank. And if the consumer sends the scammers a check, they’re out that money, too.
“A cashier’s check is not gold,” Zavislan said. “They are not guaranteed dollars. If you deposit it, you’re responsible for those funds.”
Sometimes, the victim is arrested erroneously. That’s because a bank, noticing a fraudulent check has been deposited, suspects the depositor of fraud.
The phone number listed on a letter sent with the phony Woodforest check is to Ontario, Canada, where the letter originated. It contained only a recording – in English and French – saying there was no more room for any messages.
The U.S. Department of Justice, with Canadian authorities, has issued warnings about check scams, saying the number of schemes has increased by more than 500 percent in the last four years.
Said Zavislan: “The big thing is not to accept at face value any check that a stranger sent you in the mail.”
Staff writer David Migoya can be reached at 303-954-1506 or dmigoya@denverpost.com.
