- Craigslist is a popular "hunting ground" among fraudsters
- Fraudulent checks come in various levels of detail and realism
- Fraudsters mail dozens of fakes checks knowing only one or two will convince their "mark"
Craigslist can be a handy resource for buying and selling goods and services -- and it is also a very popular vehicle for scammers deploying simple check fraud tactics.
Detailing the Scam
On YouTube, Traveling Director demonstrated a common Craigslist scam by offering some furniture for sale. His asking price was $300, but he had "buyers" consistently send checks for much, much larger amounts of money. It's interesting to see the range of quality in the forgeries -- a couple of the checks he received are downright amateurish.
Texting the scammers
Some fraudulent checks look more authentic than others.
The scam is common: A "buyer" sends a check for a much larger amount than is asked for in the ad. The seller deposits the check, and mistakenly feels secure when he or she sees their account balance change to reflect the amount written on the check. The buyer asks for a portion of the money back -- and is willing to pay a bit more than the original asking price to cover the "error."
The seller assumes that once the check is deposited, they have the money; they return a portion of the funds back to the buyer -- in this case, the scammer.
Keys to the Scam
Scammers don't mind sending out dozens of these fake checks in hopes of hitting the jackpot with just one. There are a couple of keys for the scam:
1. The seller is unaware of the rules around funds availability policy for banks
It turns out that the average bank customer is unaware of the funds availability policy, and that, by law, a bank must make a certain amount of funds available for withdrawal shortly after the check is deposited. This becomes a real issue for the account holder as they are responsible for all of the funds until the check actually clears, which, as we know, can take up to three days.
Theresa Chiechi © The Balance 2019
As long as there is a gap between "available" and "cleared," scammers will use the "please send me back a portion of my overpayment - and keep some for yourself!" gambit.
2. Scammers will reply to thousands of ads, utilizing "money mules"
As you can see from the video, the YouTuber receives a handful of responses to his advertisement to sell his couch and the envelopes are sent from all different locations. As we detailed last week in our "What’s It Like to be the Personal Assistant to a Fraudster?," the scammers leverage "money mules" to send out the checks from a various locations, enabling the checks to be delivered quickly to increase chances of success.
Click the image above to watch the video.
3. Scammers Will Push the Victims to Use Mobile RDC to deposit and Return Funds through Electronic Transfer
While this is not detailed in the video above, this may be the most important part of the scam in order for it to be successful. As we see from the video, some of the checks were poorly created, to say the least. That's why scammers will likely push the victims to use their bank's mobile app (mRDC) to deposit, as a teller will almost assuredly inform their customer that the check appears to be fake.
The scammers will then instruct the victim to transfer the money through a variety of electronic means -- Venmo, Cash App, Cryptocurrency, etc. -- in order to secure the funds before the victim is aware that the check has bounced. If the victim returns a personal check of their own, there is a likely chance the victim is able to put a stop on the check before the scammer is able to obtain the funds.
These YouTube videos are great at keeping the general public aware of scams that are being committed today. Banks are doing their part by creating dedicated web pages on their site to provide additional information to their customer base -- but is it enough?
To thwart the scammers, banks need to invest in image analysis technologies leveraging AI and Machine Learning to protect their customers. Even though some of the checks are poorly made -- and most likely printed using a $35 printer -- if the victim deposits the check through mRDC, the scam will likely be successful without technology closely analyzing the attributes of the check image to detect signs of fraud.
Click the image above to watch the video.