Fraudulent Money Orders: What You Need to Know

Money orders can be a convenient and secure way to send and receive payments, but they can also be a tool for scammers. According to the article, the U.S. Postal Service reports that money orders are a common target for identity thieves.

Fraudulent money orders often involve counterfeit or stolen checks that are converted into money orders. This can be done by cashing the check at a bank, then using the funds to purchase a money order. The article notes that this tactic can be difficult to detect.

If you're the victim of a fraudulent money order, you may not realize it until the money order is cashed. The article states that money orders can be cashed at many locations, including banks, check cashing stores, and even some grocery stores.

To avoid being a victim of a fraudulent money order, be cautious when accepting money orders from strangers. The article advises checking the money order for any signs of tampering or alteration before cashing it.

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If you're unsure if a money order is real or not, there are some general tips to keep in mind. Check the amount to make sure it doesn't exceed the legal limit, which is $1,000 for domestic and $700 for international money orders.

You can also check for proper security features, but what are those exactly? The USPS provides a way to verify money orders, and if you're still unsure, you can call the U.S. Postal Service Money Order Verification System at 866-459-7822.

If you're dealing with a bank-issued money order, be on the lookout for red flags like missing security information, photocopied markings, or smudged ink. If you hold the money order up to the light and don't see watermarks or faint designs, it might not be authentic.

To verify a money order from Western Union or MoneyGram, look for security features like watermarks, heat-sensitive marks, or perforated edges on one side. You can also call their verification hotlines: MoneyGram at 1-800-542-3590 or Western Union at (800) 999-9660.

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Here are some common signs of a fake money order:

Keep in mind that these are just general guidelines, and it's always best to verify the authenticity of a money order with the issuing institution.

Be cautious of letters that claim you've won a foreign lottery or are the beneficiary of someone's estate, as they often include a cashier's check to cover a processing/transfer tax or fee.

These letters may ask you to deposit the check into your account and wire the fee to a third party, often in a foreign country.

Selling goods online can also lead to scams, where a buyer sends you a cashier's check for the agreed price, but it turns out to be fraudulent.

Excess of purchase price scams are similar, where the buyer sends you a cashier's check for more than the purchase price and asks you to wire some or all of the excess to a third party.

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Unexpected windfalls and mystery shopping scams often involve cashier's checks, so be wary of these types of letters or offers.

If you're asked to wire money to a third party or use a portion of the funds to purchase merchandise, it's likely a scam.

Fraudulent cashier's checks may be written on the account of a real person or company, or appear to be written on an account with insufficient funds to cover the check.

The result of these scams is that the fraudulent check will be returned unpaid, and you'll lose either the goods you sold or the money you sent to the third party.

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If you deposit a fake money order, the bank may cash it and make the funds available right away, but there's a risk that the bank will charge a "deposit item returned fee" if the money order is found to be fake.

You can expect to pay a significant amount for return deposit fees, which vary by bank, but one bank may charge more than another.

If the bank does charge a return deposit fee, you'll be out of pocket the amount you spent, as well as the fee itself, which can be a costly mistake.

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You deposit a fake money order, and the bank might cash it right away, making the funds available, but they may hold back a portion until the money order is verified.

The bank will likely charge a "deposit item returned fee" if the money order is found to be fake, and you'll have to pay it.

You can expect to pay different fees at different banks for return deposit fees, but the exact amount varies.

If you deposit a fake money order and spend the money, the bank will expect you to cover all the funds once they inspect it and determine that it's fake.

The scammer will ask you to refund them the extra money, but the money order is bogus, and you'll have to cover the full amount.

In a fake check scam, the scammers ask you to deposit a check for several thousand dollars and wire some of the money back to them, but by the time your bank discovers you've deposited a bad check, the scammer already has the money you sent.

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The bank may take weeks to discover and untangle a forged check, and until then, you're responsible for any funds you withdraw against that check.

You're responsible for the checks you deposit, and if you deposit a bad check, you'll have to repay the bank.

Under federal law, the bank must give you some of the money from a check you deposit right away, but that doesn't prove the check is legitimate.

You could end up owing the bank money later if you deposit a check from someone you don't know and give them cash now.

If you've become a victim of a fraudulent check scam, it's essential to contact the issuing bank directly to report receipt of the check and verify its authenticity. Don't use the phone number on the check, as it's likely a scam artist's number.

To locate the bank's mailing address, check the FDIC's website at https://research.fdic.gov/bankfind/. This will help you get in touch with the right bank.

You should also notify the Federal Trade Commission (FTC) about the scam, either by calling 1-877-FTC-HELP or filing an electronic complaint on their website at www.ftc.gov.

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Money orders can be a convenient way to send or receive money, but it's essential to verify the authenticity of a money order to avoid potential consequences. If the dollar amount on a money order seems suspicious, it's likely a red flag.

Here are some key things to check:

Cashier's checks are often presented as legitimate payment options, but they can be very difficult to verify as genuine. Your bank may not be able to tell if a cashier's check is fraudulent when you deposit it.

Even if your bank makes the funds available in your account, you can't be certain that the check has cleared or is "good." This is because your bank has to make funds available within a specific period of time, usually one business day.

Scammers try to make cashier's checks look genuine, which can delay discovery of the fraud.

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If you're not comfortable using a cashier's check, there are alternative payment methods available.

You can use a personal check, which is a more common and widely accepted form of payment.

A bank transfer is another option, allowing you to send money directly from your bank account to the recipient's account.

Electronic payment methods like PayPal or Venmo can also be used, offering a convenient and secure way to send and receive payments.

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A cashier's check is issued by a bank, which means it's paid by the bank's funds, not the depositor's. This makes it a relatively safe transaction.

A cashier's check is payable to a specific person, and it's essentially a guarantee that the funds will be available.

The bank's involvement also means there's very little risk that the instrument will be returned.

Cashier's checks can be a convenient alternative payment method, especially for higher dollar amounts. They can be issued by a bank and are payable to a specific person.

A cashier's check is paid by the bank's funds, not the depositor's, which reduces the risk of the instrument being returned. However, scammers can still make a cashier's check look genuine to delay discovery of the fraud.

It can be difficult to tell if a cashier's check is fraudulent, even for your bank. Your bank may not be able to determine that the check is fake when you deposit it, and may only learn of the problem when the check is returned unpaid by the other bank.

Your bank may make the funds available in your account quickly, but that doesn't mean the check has cleared or is "good."

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To buy a money order, you can visit a bank or other financial institution that offers this service. Some common places to buy a money order include grocery stores, pharmacies, and check cashing stores.

Before you buy a money order, it's a good idea to check the fees associated with it, as they can vary depending on the issuer and the amount being sent.

You'll typically need to provide identification and the amount you want to send to purchase a money order. The issuer will then provide you with a receipt and the money order itself.

Some money orders may have a limited lifespan, so be sure to check the expiration date before purchasing.