FINRA Warns Public of Scam Using Fake FINRA Checks
The Financial Industry Regulatory Authority (FINRA) today issued an Investor Alert called Beware of Fake Check Scams, warning the public about scams that target job-seekers and those looking to make a little extra cash. These scams defraud victims by getting them to deposit and then transfer funds from fake checks that appear to be from legitimate companies—including FINRA.
Con artists perpetrate these scams by sending an authentic-looking check to their intended victim. In many instances, the name of a real company appears on the check, as well as real account and routing numbers. The victim is instructed to deposit the check into his or her bank account and then transfer a portion of the money to someone else. Days later, the bank informs the victim that the check was counterfeit and that he or she is liable for the amount withdrawn, usually several thousand dollars.
"FINRA is extremely concerned that fraudsters, taking advantage of tough economic conditions, are using fake checks to rob job-seekers. Consumers should be very cautious when asked by someone they don’t know to cash a check and transfer the money,” said John Gannon, FINRA's Senior Vice President for Investor Education.
In order to protect themselves from these frauds, FINRA is advising the public that:
- No legitimate company will overpay you and ask that you wire the difference back to the company or a third party.
- Calling the company on the check directly, using a phone number that you obtain from directory assistance, is the best way to verify the check.
- It can take 10 days or more for your bank to determine that a check is counterfeit. Don’t wire or transfer any funds until you have verified that the check has cleared—even if the bank allows you to withdraw the money sooner.
FINRA has identified two current scams involving fake FINRA checks. In the “mystery shopper” fraud, victims are lured by job advertisements for mystery shoppers, such as on the popular Web site Craigslist (www.craigslist.org). When victims respond to the ads, they are led to believe that they have been hired as mystery shoppers to evaluate the services of money-transfer companies, such as MoneyGram.
In a similar scheme, individuals are being scammed in a “modeling” fraud. In this scam, the victim is “hired” by the fraudsters to model, after that individual has responded to an online posting or posted information online, such as with a modeling clearing house. The victim then receives a legitimate-looking check and is told to cash the check, wire some portion of the proceeds to a third party—such as a “supervising crew”—and keep the remainder as payment.
Fake check fraud victims are urged to contact their local police, the Internet Fraud Complaint Center (a partnership between the FBI and the National White Collar Crime Center) and the U.S. Postal Inspections Service (if the check arrived by U.S. mail).
FINRA, the Financial Industry Regulatory Authority, is the largest independent regulator for all securities firms doing business in the United States. FINRA is dedicated to investor protection and market integrity through comprehensive regulation. FINRA touches virtually every aspect of the securities business – from registering and educating all industry participants to examining securities firms; writing and enforcing rules and the federal securities laws; informing and educating the investing public; providing trade reporting and other industry utilities; and administering the largest dispute resolution forum for investors and firms.
For more information, please visit our Web site at www.finra.org.