I could so easily have fallen for it. My children advertised their rental property on the internet. They had a response from a young man in England who was coming to Seattle for a year of graduate work in chemistry. Thirty years old. Polite. Nonsmoker. Educated.
Everything sounded perfect, until he made a request that set off alarm bells.
Advance Fee Scams
I checked it out and ultimately uncovered what the FBI broadly refers to as an advance fee scam — one of a growing number of cybercrimes investigated by the FBI each year.
Advance fee scams take place when “the victim pays money to someone in anticipation of receiving something of greater value, such as a loan, contract, investment, or gift [or in my case, a lease] and then receives little or nothing in return.”
Apparently, the father of our renter-to-be sent a money order to cover the first month’s rent and deposit, plus money for his son’s ticket to Seattle. Our renter wanted us to wire him the money for the ticket, but only after we received his father’s money order.
At first glance, it seemed reasonable. After all, we would have the money order (a prepaid instrument) in hand. Sounds safe enough. But it turns out that, according to the FBI, there has been a significant increase in the prevalence of counterfeit postal money orders (or CPMOs) since late 2004.
Common targets are classified advertisers (like us), small internet retailers, and people contacted in chat rooms or by email. If we hadn’t decided to wait for the funds to clear before wiring the money, we would have been scammed to the tune of a first class U.K.-to-U.S. airline ticket!
The lesson here is to always, always wait until you have the funds in your account before you take any action — and that may be longer than you think. It turns out that even legitimate money orders may take as long as four to six weeks to clear.
Advice from the FBI
To avoid falling for these schemes, the FBI’s Cyber Investigations offers the following sensible advice:
Follow sound business and financial best practices. Don’t diverge from common practice without a thorough investigation first. Remember, if it appears too good to be true, it probably is.
Do business with people you know. If you’ve never heard of the business or the person who has approached you, investigate. Your accountant, banker, broker, attorney, police, the Better Business Bureau, and even the FBI may be able to help.
If the potential agreement is a complicated one, be sure you have a thorough understanding before you enter into it. Seek advice from professionals with relevant expertise and experience.
Don’t sign any nondisclosure or noncircumvention agreement that prevents you from independently verifying the opportunity or the people involved.
Businesses without street addresses and phones that are never answered but are always forwarded to an answering machine should set off alarm bells!
In addition to advance fee scams, the FBI warms of other common fraud scams that include telemarketing fraud, Nigerian letter schemes, identity fraud, and health insurance schemes.
For more information, refer to the FBI website here. You’ll also find useful information on a number of other investment-related scams and internet scams such as internet auction and credit card fraud schemes.
To report an internet crime, visit the Internet Crime Complaint Center (IC3).