At Least He's Honest

Caught up in what you would thing would be an obvious scam, a lawyer admits,

"I'm a capital 'D' Dumbass."

I don't say that to be hard on the man, but to emphasize this: When you're offered huge amounts of money for doing virtually nothing, odds are you're being scammed.

I don't want to review the entire history of international financial scams - it's long, and predates the Internet. Yes, those promises of wealth from foreign lotteries you haven't entered, deaths of foreign relatives you didn't know existed, or desperate millionaires who can only get their money out of a developing nation if you let them wire it to you? There was a time that they came by mail or fax. Now they come primarily by email, and although they evolve the central theme remains the same:

1. You are selected at random, for no apparent reason;

2. You are offered a great deal of money to do virtually no work; and

3. If you go along with the scam, you'll end up losing a great deal of money.

A relatively recent version of this scam is a "work at home" scam, where you supposedly process payments for a company, forwarding them their balance when the checks clear. You retain a percentage, say 10 - 20%, as your fee. Now it should be pretty obvious that there's something fishy here - why would a company direct its clients to send you their checks (more probably, money orders), and pay you to process them, when it would be cheaper and easier to receive the payments directly?

I received a phone call the other day, inspired by an article I wrote a few years ago on this type of money order fraud. It was a story I expect to hear repeated quite often in the current economic climate - a woman, facing financial hardship, answers an ad offering home-based employment. She signs up, starts receiving and processing money orders, and "clears" a couple of money orders through her bank before they are revealed to be fraudulent. She's already forwarded the money, less her "share", to an international address. Her bank wants its money back from her. The money orders in that case looked very real because they were real - all except for the dollar figures. The scammers had managed to steal some blank money orders.

But that woman is "small fry" compared to the lawyers who have been targeted. It's exactly the same deal, except the scam comes from somebody claiming to represent an international corporation trying to collect on an unpaid account - tens or hundreds of thousands of dollars. They offer the lawyer a sizable percentage of the money recovered. Ironically, this percentage vastly exceeds the 10 - 20% offered in the "work at home" version of the scam, because ordinary people would probably be incredulous that they could get 30 - 40% of the payment merely for processing a check. The lawyer-victims, not so much.... They sign up, call the debtor, are told, "No problem - I'll mail that right out," get a check within days, and it never occurs to them to wonder, "If the debtor was that eager to pay, why didn't the creditor simply call and ask for payment and why would they offer, let alone agree to, this fee?"

Here's my proposed solution - banks should prepare brochures outlining the most common version of this scam, and have them available at their counters. When a customer comes in to deposit a money order, their tellers should be instructed to ask, "Do you personally know the person who sent you that money order? Have you seen our brochure on money order fraud?" Even at the ATM machine, banks could give a general warning about money orders to customers making deposits - display the full warning one time, and offer a "press here to learn about money order scams" option for future deposits.

Because I suspect that 90% of the people suckered into this type of scam, once made aware of how the scam works, would figure out whether or not they should be depositing the money order. Banks lose money on these scams, as well. Wouldn't this simple step be less costly for everybody?