More than $2.1bn in counterfeit cheques destined for the US have been seized and 77 arrests made in Netherlands, Nigeria and Canada as part of an international crackdown on cheque fraud scams.
News of the busts came at a US conference on Wednesday launching an initiative - dubbed the Alliance for Consumer Fraud Awareness - designed to help consumers and small businesses to learn how to spot and avoid fake cheque scams. The full extent of the fraud is unknown, but scams in which fraudsters trick consumers into accepting phoney cheques or money orders and wiring some of the money in return are increasing at an alarming rate, according to the National Consumers League (NCL).
The NCL received more reports about fake cheque frauds by the middle of September than the whole of 2006. Victims of fake cheque scams are losing an average of $3,000 to $4,000.
Prospective marks are offered "processing fees" for depositing cheques which later turn out to be bogus. The trick works because US banking customers are often quickly credited for deposits. Although funds appear in accounts, leading targets to believe all is well, they have not been cleared through the system. Days later when the banks discover the cheques are fake and deduct funds, the victims - who've already sent money to fraudsters thinking that all is well - are left out of pocket.
Many potential victims are unaware that they are liable for losses if the cheques they deposit prove to be hooky. NCL’s new FakeChecks.org website aims to help educate consumers on the issue.
"The most important thing consumers need to know to protect themselves from fake cheque scams is that there is no legitimate reason why anyone would give you a cheque or money order and ask you to wire money anywhere in return," said Susan Grant, NCL vice president of public policy.
A recent international operation targeting the scam led to 16 arrests in Nigeria, 60 in the Netherlands and one in Canada, according to Greg Campbell, US Postal Inspection Service inspector in charge of global security. Three suspects from the Netherlands and Nigeria have been extradited the US and are awaiting trial. Extradition proceedings are pending against five others, Reuters reports. It adds that UK police were also involved in the operation. ®