The Science of a Simple Scam

Last weekend, I put up a couple of ads on Craigslist for some of my old furniture and appliances – amongst them, a big rug.  For those of you who have never heard of such a thing, Craigslist is an online, unsecured, unverified market place.  You put up your ad for free and prospective buyers can contact you over email.  You then haggle, arrange a rendezvous and exchange your wares.  This is all well and good in theory, but in practice, things get a bit more….  interesting.  Consider this reply that I received with respect to the rug that I put up for sale.

still available for sale? please let me know..

This is how most Craigslist conversations start.  Very informal.  Not much detail revealed besides an email address (and perhaps, a name).

It is for sale!  You can reach me at XXX-XXX-XXXX.
Let me know when you want to come pick it up.

So far so good.

Hi,
Thanks for your response. I'm going on a vacation to London
but I will instruct my assistant to prepare and mail your
payment which I'm sure you will get in about 4 - 6 business
days. I'll add $20 extra for the delay. I'll pay by M O or
cashier check so send me your info (i.e full name, mailing
address and your phone number) so payment can be mailed out
immediately. I will also make arrangement for pick-up which
will be after you must have received and cashed the payment.Awaiting your info.Thanks
Frank

Now things are getting a little more interesting.  How many of you think that this is reasonably innocent?

Really?  Stealing a $40 rug?

As you may have guessed from the title of this post, I don’t believe that the buyer is legitimate .  But for me to be suspicious, I must at least demonstrate a possible mechanism by which this person would have tried to cheat me.  There doesn’t seem to be any such obvious mechanism.  The man wishes to send me a cashier’s check, which can’t be bounced and he even promises to wait to collect my rug until after I have cashed the check.  He lets me know how long to wait and is kind enough to send an assistant to pick up the rug, but only after I have been paid.  There seems to be no downside.  And besides, who would want to steal a rug?  It doesn’t even seem worth it.

“I give you money…”

And this is how a lot of people, especially older or more vulnerable people fall for this scam.  The heart of the scam isn’t in stealing your merchandise.  The heart of the scam is in using you to cash a check.  Cashier’s checks can be faked and it takes a while for it to be discovered.  US banking regulation requires that money from deposited checks be made available to customers within a few days.  International checks however require, on occasion, weeks to clear.  Numerous intermediary agents are involved and verifying the authenticity of a check quickly is next to impossible.  But this still doesn’t make sense.  You’d be the one cashing the check, not the scammer.  What does he gain from this?

“…, you give me money”

The scam works because the scammer gets you to send him money – your real money.  The check being mailed usually contains an error.  Instead of $60, it will be for $6000.  The scam artist usually explains this as an innocent mistake done by the bank that they can’t reverse because the check is live and has been mailed out.  Since it is an international check, such mistakes may even sound legitimate, because it’s not hard to see 60.00 or 60,00 being misinterpreted as 6000.  But now you have a live check that far exceeds the value of the merchandise being sold.  The scam artist now asks you to wire back the rest of the money while leaving you a generous tip for your co-operation.  Electronic wire transfers generally cannot be reversed or cancelled, especially during international deals.  The scam artist now has real money.  The bank at which you cashed the fake check will only discover the error a week or two later.  The bank, at this point, would come after you since you are the party responsible for depositing the check.  People have had their savings stolen and gotten sued by banks due to such scams.  There is usually no recourse against the con-artist because he is located in a different country.

Lessons Learnt

The crux of the scam is that the scammer exchanges his fake money for your real money.  It is quite easy to avoid this scam if you never send money back to a scammer.  Detecting one may be a little hard because scammers write and sound like real people.  They even entice you with bits of extra money and compliments to encourage you to fall for their scam.  They are polite, they DON’T WRITE IN ALL CAPS, they are not always the ambassador to the prince of Nigeria.  Just remember never to ever wire funds to people you meet on Craigslist.  Do not deal with people internationally (or even out-of-state in most cases).  And do not ever assume that money orders or cashier’s checks are fool-proof or safe.  They are only marginally safer than personal checks, and even then, only if you have any recourse against the person who writes it.

Related articles

• Craigslist Scammers Ship Checks Via Fedex (socyberty.com)
• 8 Signs You’re Being Scammed on Craigslist (nakedlaw.avvo.com)
• Fake Check Scams (thejnlgroup.wordpress.com)
• Consumer Fraud in The United States (creditloan.com)