The first six checks went through without a hitch. The fourth was only $1,000, but when Susan Crosby presented it at her bank, she was asked to wait.
“A man took me aside and said the other checks had been returned as counterfeit,” Crosby recalled. “I was in shock. I had been had. I owed the bank $19,000. I could be prosecuted. This can’t be happening.”
Crosby had spent many hours online and on the telephone with Brian Robinson, the wonderful man she’d met on Match.com who had sent the checks.
Robinson, a Grand Rapids, Mich., man who had been performing a phone-installation job in Nigeria, was finally managing to extricate the payments for his hard work out of the semi-dangerous backwaters where his job had taken him. In days, he was returning to the states to come restart his life with Crosby, who less than a year earlier had lost her spouse … just like him. They’d professed love to each other over and over.
Robinson insisted to Crosby there had to be a mistake: “His client would never send him counterfeit money orders. He had paid him in this way before. Don’t worry, love. This is a misunderstanding.”
Unfortunately, Robinson already had the cash Crosby had wired back to him via Western Union.
“I called the state police, city police, the FBI and the Secret Service,” Crosby said, “but no one would even come by to write up a report. Nigeria is a third-world country, and they do not cooperate with the U.S. I felt like an atom bomb had exploded in my heart. I could go to jail. I took money from my 401k and hired a lawyer to defend me. After a week, my attorney cut a deal with the bank. They would not prosecute me, but I had to repay $10,000.”
The bank ate the other $9,000. Crosby had to refinance the modest house she and her late husband had bought just a few years earlier with a VHA loan.
Snopes.com points out that there is only so much law enforcement can do for victims. “Your local police department cannot send officers to Nigeria to arrest the fellows who are attempting to con you out of your life savings any more than Nigerian police could show up on your doorstep to put the handcuffs on you. … Ergo, the best protection is an awareness that the laws of your country are not always enforceable in other lands, so it behooves you to always proceed with caution when dealing with people or business entities in foreign locales.”
Crosby also found out that Brian Robinson was an illusion. The pleasant picture he sent her was stolen from a model. There was no way to even find “Brian.”
You could track the computer – in the unlikely chance the foreign government would agree to help – but all the e-mails were sent from an Internet café that thousands had access to.
A few days later, Crosby accidentally received a package from Federal Express like the others she had received. The package contained nine envelopes in it addressed to women all over the country. Crosby opened two or three to find Walmart money orders, cashier checks and one stuffed with $3,000 in counterfeit $100 bills. One envelope was addressed to another Kentucky woman in her town.
Crosby called the Secret Service again. This time they were at her house within 30 minutes. The money was the best counterfeits he had seen, the agent told Crosby. They promised to set up a sting using the addresses on the envelopes.
“All of the people were like me – innocent people scammed out of money,” she said. “That was the end of it. I paid back the bank and learned a very hard lesson.”
A statewide issue
“These scams are a big problem and unfortunately with the advance of technology, they are a growing problem,” said Jack Conway, Kentucky’s attorney general. “We have a whole division of consumer protection dedicated to this, but they are awfully sophisticated.”
Conway said there is no data to track the number of scams that occur each year, but his office has seen an increase in the number of complaints, particularly when it comes to phishing scams.
Phishing scams – in which criminals trick you into giving them your account or personal identification number (PIN)? by impersonating a company or institution you do business with – are second only to advance-fee frauds such as the Nigerian scams or more recently lottery and sweepstakes offers in which you supposedly have won a prize but have to send a fee to cover processing and shipping. Loan-consolidation scams come in third, and charities fraud is the fourth most common scam in Kentucky, according to Conway.
Conway said the housing foreclosure crisis has brought out a lot of scams in which criminals contact an individual offering a free debt-consolidation loan or offering to serve as a middle man to a company that offers debt consolidation. You need only pay an up-front fee. Of course, the fee is the scam. There is no debt-consolidation company and no way to get the fee you paid returned.
“Anytime a consumer receives an offer that requires pre-payment for something yet to come, whether it is a prize or a service, that should automatically raise your suspicions,” Conway said. “Every company is required to be registered with our Office of Consumer Protection. Check to see if they are on that list.”
There are also some obvious early warning signs.
“If the offer comes from a telemarketing call, be very suspicious,” Conway said. If you are pressured, become suspicious.”
Charities fraud often occurs with “sound alike” names. A fraudulent charity sounds like one you have heard of, but the money does not go to help anyone or only a tiny percentage of the money goes for the stated purpose. Again, Conway suggests checking with his office – ag.ky.gov, which has a direct link to Consumer Protection and a sublink to charities – or the Better Business Bureau to research the charity before giving.
Businesses are also victims
These scams also hurt businesses.
“This is definitely a bank issue,” said Debra Stamper, executive vice president and general counsel for the Kentucky Bankers Association. “Banks aren’t any different than consumers.”
Stamper said it is difficult for banks on many fronts. Often, they suspect something is a scam but are in a precarious position with their customers.
“You always have to weigh your customers’ right to make bad decisions as long as they have all the information,” Stamper said. “A banker may suspect something is a scam, but the consumer still wants to transfer money. It is their money, and it’s often a fuzzy issue: Which is a scam and which is a bad decision?
“This is especially true with financial crimes against elderly,” she said. “We hear stories about adult children who come in and report that someone is taking advantage of their elderly parent, but the parent is lucid and has decided it is worth paying for. The child may think it is an irresponsible decision, but the parent is an adult.”
Like consumers caught in the web, banks don’t want to discuss this publicly.
“Banks don’t want to divulge the full impact of the cost of fraud that has occurred to the customer through them,” said Stamper. “It is not a good statistic. There is also the issue of it being hard to get a handle on. You don’t always know which transaction is a scam.”
To help banks and their customers, the KBA has developed Fraud Net, a secure Internet exchange of information between banks, law enforcement and regulators.
“We share information between the three groups about scams that are occurring. A lot of times this can be beneficial in catching someone. Many times, scams start in a single location and spread from there,” Stamper said. “It’s even true for bank robberies; you can watch the reports coming in and see that bank robbers are traveling down a highway, hitting banks as they go along.”
One of the scams that directly affect banks is a “spoofing” scam that looks like it is from a legitimate bank, usually the individual’s bank, complete with an accurate logo and the same look as the bank’s Web site. The very name tells what spoofing scams are all about: They are about pretending.
Real banks don’t e-mail you for info
In a bank spoofing scam, a person receives an e-mail or pop-up message, purportedly from his or her bank. The bank needs some personal information. Sometimes, the message will ask you to go to the bank’s Web site: “Just click here.” When you click, you arrive at what looks like the bank’s Web site. It isn’t.
“No bank or credit card or any financial service is going to use e-mail to ask for personal information,” said Davis L. Huston, senior vice president of Wilson & Muir Bank and Trust Co. in Bardstown. “We already have it, and we would never get it by that method. If we need information, we would send a formal letter, call you and ask you to go to the bank in person. Generally there is also some sense of urgency in this e-mail, too. We would never do that, either.
“I am not saying not to bank online. Just be sure it is a secure site,” Huston said. “If it is secure, the address will always say ‘https://’.”
The ‘s’ after http at the beginning of the Web address indicates it’s a secure, protected site.
Huston said it also is important for everyone – businesses and individuals alike – to check their bank statements monthly. Many problems can be cleared up within 30 days that cannot be rectified after that time has lapsed. There is more advice for how to deal with these scams at wilsonmuribank.com.
Crosby also has advice.
“These guys are not Americans,” she said. “They trip up with bad English every now and then. I remember when he (Brian Robinson) was telling me he couldn’t wait to come to Kentucky and start his company here. Why don’t you just send a resume around? I asked him. He said, ‘What do you mean?’ He didn’t know what a resume was.
“Trust yourself and your instincts. I noticed that Brian had an accent, but he said he was from Finland and he was working out of the country. I just let it pass, but my instincts were telling me something was wrong.
“Test them. Ask about what schools they went to, where they lived. Don’t ever send any money for any reason. If the issue of money comes up, there is a rat involved. A total stranger you have never met you should never have any reason to ask for money. … You could just kick yourself so hard to think you would fall for it,” Crosby said.
But many do every day, and perhaps Stamper has the best advice of all.
“If we felt outrage instead of shame when this happens, it would help everybody,” she said. “More scams would be reported and it would be harder to fool people.”
EDITOR’S NOTE: Financial scam perpetrators camouflage age-old schemes with the latest trends and technologies, and find victims in Kentucky too regularly. The example reported here is real. It’s a sophisticated variation of the Nigerian advanced-fee scam that incorporates the romance fraud and elements of the reshipping scheme. In the August issue of The Lane Report, Part I of our report on common but little publicized financial fraud detailed how the scammer spent dozens of hours gaining the victim’s trust, ultimately costing Kentucky resident Susan Crosby (not her real name) and her bank thousands of dollars apiece. Law enforcement here had no authority to arrest anyone, except perhaps her. Similar scenarios occur daily here and across the nation. Information and education can protect you and your business from joining the ranks of victims. Find out how to avoid being a victim at lookstoogoodtobetrue.com/fraud.aspx.