Consumer Advisory Bulletin- September 2010
Wire Fraud Targets Your Mind & Your Money!
Maybe it's a startling phone call or e-mail from someone who says they are a close relative or friend who claims they're facing an emergency, and they need you to wire cash quickly. Or maybe it's an exciting call or e-mail congratulating you for winning an "advance" on a sweepstakes. Perhaps it's a work-at-home opportunity that seems too good to pass up.
Saying no may be the best decision you could make, because these are all real examples of wire fraud. These wire transfer scams involve people using a telephone or the Internet to target their victims, often senior citizens. They also include a request for you to wire money. Unfortunately, in most cases you have little or no chance to recover your losses.
● Grandparent Scam: This is a particularly cruel scam targeting grandparents. Typically, someone will call claiming that they are a grandchild who faces a sudden emergency, and needs money to get out of trouble or get home. The grandparent, who would do anything to help their grandchild, is convinced to send money, often thousands of dollars, immediately through a wire transfer service.
● Advance, Overpayment and Sweepstakes Scams. A person or what appears to be a company sends you a payment advance, or a check for more than what they owe you, and they ask you to wire them the balance. Or maybe they'll send you a check-sometimes as part of a "sweepstakes"-and request you to wire back a "transaction fee." The check may look so real it even fools bankers, but in these scams the check will bounce. You're also out what you wired the con artist, plus other potential costs.
● Work-at-Home Scams. Most cards have cash-advance fees with no "grace period" -- interest charges start immediately. Late fees and over-the-limit fees can go as high as $25 on some out-of-state cards. Consider Iowa-issued cards because they have greater protections and cheaper fees. Avoid cards with an annual fee and expensive "add-on" items such as "free trial" credit card protection plans, insurance, and buyers' clubs.
Wire transfers can be as dangerous as sending cash to crooks. Never wire money to strangers in a hurry without taking time to ask questions and verify stories. If someone claims to be a relative or a friend, ask questions that only they could answer.
Be suspicious of anyone who sends you a check or money order for more than the amount you are owed, or a sudden windfall, especially if you are expected to wire the difference or a "transaction fee." If you spend the money, you'll need to reimburse your bank the full amount.
To file a complaint or get more information, contact the Iowa Attorney General’s Consumer Protection Division, Hoover Bldg., Des Moines, IA 50319. Call 515-281-5926, or toll-free to 888-777-4590. The website is: www.IowaAttorneyGeneral.gov.
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