If you were scammed recently with a money order, the counterfeit might have been an instrument spoofing the MoneyGram brand. These money orders have been known to appear in all the too-good-to-be-true/don’t exactly make sense come-ons being passed by spam e-mails or via a direct solicitation in a chat room.
In case you are not familiar with all the variations of these come-ons, they include, but aren't limited to (new lures surface frequently), the secret shopper, romance, lottery, work-at-home and auction scams.
The common denominator in most of the scams is there will be a request to send the money you receive via wire transfer (if you don’t get caught), to the fraudster sending you this garbage for a small cut of the total amount. That is unless they are buying goods from you. In this case, the item you are selling is what they want.
In the past, a simple call to MoneyGram’s verification line (1-800-542-3490) normally was all that was needed to reveal the fact that the item was fraudulent. Unfortunately, this is no longer the case. The criminals producing these instruments are now taking advantage of a flaw in the automated verification system, which is tricking people into believing that the money orders are good.
When a MoneyGram money order is called in for verification, the system prompts the user to enter all the particulars of the instrument, including the serial number and dollar amount. If the system doesn’t spot a discrepancy, it gives out a standard disclaimer stating there are no stops or holds on the item. If the system catches a discrepancy, it directs the caller to a live operator during their business hours.
In recent weeks, I’ve received reports of this being exploited in two ways. In the first instance, a legitimate money order is purchased for a small amount (normally $1.00), then is chemically washed and altered to reflect a large dollar amount. It is then passed before it registers in the verification system, and since the system doesn’t recognize the dollar amount, it gives out the standard disclaimer then tells the caller there are no stops or holds on the item. According to the people I’ve asked, money orders do not register in the system for anywhere between 24 and 96 hours after being issued by a MoneyGram agent.
In these instances, since the item was printed on actual paper, it contains all the known security features. These include a heat sensitive circle, which changes color when rubbed.
A second variation of this scam has also been seen. In this variation, the instrument is a copy of a money order purchased for a small dollar amount. These will pass muster in the system as described above, but the security features will not be present. In this second version of the scam, the dates were printed to make it appear as if the item had been purchased several weeks before the legitimate item actually was. I suspect this was to trick people who had already discovered the "washed instrument" mutation of this scam.
When I first started getting reports on these variations of the scam, I thought it might be only targeting a limited geographical area. Normally when washing items occurs, this is the case. Since then, I've discovered this is happening throughout North America, and the items are being shipped using overnight services, such as Federal Express and UPS.
I have also had reports that these are being passed not only via online come-ons, but also by professional groups who specialize in passing counterfeit instruments.
I went to the MoneyGram site to see if there were any warnings about this specific scam and found none. They do have a consumer protection area on their site, which refers to all the come-ons to trick people into cashing these items. They also have information on how to verify their product in the FAQ area for customers on their site.
The sad fact is that money order companies do not take a loss on these instruments. When the item is discovered to be a fraud, they return it to the institution who cashed it and the institution goes after (if they can find them) the person who cashed them. With any money order, it is nearly impossible to be made whole by the issuing company itself. In fact, many experts will tell you that accepting a money order is more risky than accepting a personal check. If you listen to the disclaimer on the verification line it tells you exactly that.
As far as getting these instruments in too good to be true online scams — with the sour economy — I am seeing more and more people who really want to believe they have come into a financial windfall. When they fall for these scams, one thing is for certain — they are going to be held liable for cashing the items when the scam is discovered. This will certainly include being held financially liable, but can also mean facing criminal charges.
As for counterfeit MoneyGram instruments, although a lot of them seem to be out there, they are not the only items being counterfeited. U.S. Postal Money Orders have been seen frequently in the past, too. Recently, the U.S. Postal Service redesigned their product and has a new page on their site to help consumers verify their product. Counterfeit cashier's checks, money orders, gift and travelers cheques are also known to be frequently counterfeited and used in these types of scams.
If you want to learn more about these scams, I recommend going to fakechecks.org, where you can see some highly visual demonstrations of these schemes. Another good resource on this subject — particularly if you are a victim — is FraudAid. The folks at FraudAid actually provide resources and advocate for people falling for these scams.