Check’s in the mail, but better not spend it
‘Lottery wins’ seem legitimate at first, but scams cost money and heartache
By Seth Burkett
DAILY Staff Writer
email@example.com · 340-2355
Claudia Bolding thought she'd won big when a check for $4,975 showed up in her mailbox. The accompanying letter said the check was the first installment of a $250,000 jackpot from an out-of-state lottery.
"I thought I had a sure-enough blessing because I really needed it, and then I found out I was going to have to pay it back," the 61-year-old Courtland resident said.
Bolding took the check to Family Security Credit Union, where the check appeared to pass inspection.
"The lady at the bank said it was a good check from a good bank, but that they had to hold it for so many days," she said. "They held it five days and cleared it. And then the bank called me and said it didn't go through."
Bolding had already spent half the money on bills, car repairs and tithes.
"(The bank representative) said she's going to make arrangements for me to pay it back. I spent all but $2,500 of it. I told her I didn't rest a bit last night. I'm on fixed income, but I want to do the right thing," Bolding said.
The sender of the check, listed as "Ivory Corporation" on the letterhead, intended for Bolding to send $2,985 by Western Union or MoneyGram to pay a "Non-Resident Government Service Tax" in order to claim the $250,000.
The letter provided a phone number and name of a representative to contact for further information on claiming her winnings.
"When I called that number, the man went to tell me what all I had to do to claim the money, and my daughter said, 'Mama, tell that man to speak up!' He hung up," Bolding said.
The three-way call scared off the scam artist and may have saved Bolding from following through and sending most of the money off as payment for bogus taxes on the bogus winnings.
Tricia Pruitt of the Better Business Bureau serving Morgan, Lawrence and Limestone counties said her office fields plenty of complaints about foreign lottery scams. "There are all kinds of variations on it," Pruitt said. "But none of the foreign ones are real."
The variation in which someone tries to get an honest consumer to cash a fraudulent check, usually under $5,000, and send back most of the money is becoming common, she said.
"They give you part of your winnings upfront, so you can just pay it out of your winnings. So people say, 'I'm not going to be out anything,' " Pruitt said. "That's how they're profiting, by getting people to send them the money back in the mail."
"But if they do withdraw or cash the check, they are going to be out that money, because the bank is not going to just give that money to you. You'll have to pay it back."
The checks, Pruitt said, appear so authentic it can sometimes take banks weeks to discover the fraud.
"If you get one of these checks in the mail, it's counterfeit. I can tell you that. The police can tell you that. The bank can't always tell you that," Pruitt said.
Pruitt said she personally took such a check to a bank, and the bank assured her the check was good. The check was written on a real account. It wasn't until she faxed a copy of the check to the bank of origin that someone realized it was phony.
Bonnie Teichmiller, assistant vice president of branch operations for Family Security Credit Union, said most of the checks don't go undetected for long and many don't even make it past the teller booth.
However, Teichmiller said regulations prevent the bank from placing a hold on nonlocal checks for more than five days, which isn't always enough time for a check to return to the bank of origin. After five days, if the check appears good, they will cash it.
"It makes it hard on the consumer and the financial institution, trying to weigh out whether it is real or not," she said. "... People also need to understand that they are legally responsible for anything they deposit to their account."
A company identifying itself as "USA Direct" of Las Vegas recently sent some area residents a letter similar to the one Bolding received along with a check for about $4,800, Pruitt said.
A 56-year-old Decatur man, who asked to remain nameless, said his bank froze his account after he deposited one of these checks.
The man, who said he is usually skeptical about such things, grew suspicious when he contacted USA Direct by phone and a representative arranged for him to send a cashier's check by FedEx.
He did not send the money from the check, but he had already spent some of it, he said.
Right before Thanksgiving, he went to make a withdrawal and could no longer access his account. His "lottery winnings" ruined his Thanksgiving, he said, and it appears they might make his Christmas problematic as well.
Pruitt said the holidays tend to make people more susceptible to scams, at a time when financial losses will hit them hardest.
"They're getting you at the right time," she said. "On any given day, you might not get involved with it, but they get you when you have that extra need. It's the time of year when we're trying to do our holiday shopping and buy gifts, and some extra money sure would be nice."
Pruitt said there are a few things to remember when you suspect somebody might be trying to scam you.
First, she said, participating in foreign lotteries is against the law. Second, government revenue services should not collect taxes on lottery winnings through a third party.
"If you actually won something, you shouldn't have to pay a fee to get it," Pruitt said. "If they put high pressure on you, it's a good sign that you don't need to get involved with it."
Those who live alone are the most likely to fall prey to scams, she said.
"Always tell another person, because that gives you another person to help check on it. Or call me, because we can check on these addresses. There are reports out there about these places," Pruitt said.
USA Direct, for instance, claims to be a member of the Better Business Bureau of Southern Nevada and gives Las Vegas addresses. It even displays the bureau's logo on the letters.
But the BBB said USA Direct is not and never has been a member. BBB investigators in Nevada learned the Las Vegas addresses given by the company do not exist.
Though USA Direct and Ivory Corp. both claim to be based in the United States, their phone numbers, as with many scams, originate in Canada, Pruitt said.
The mailings also come from Canada, but the U.S. Postal Service has difficulty intercepting the bulk mailings, which are in some cases freighted across the border and then dropped at post offices as domestic mail, Pruitt said.
USA Direct Inc., an apparently legitimate mail-marketing company in York, Pa., posted an alert on its Web site saying the company's name and logo are being used in fraudulent mailings and that the company is assisting authorities in investigating the mailings.
THE DAILY ran a story on Oct. 20 about a 70-year-old Decatur woman who lost her life's savings in a foreign lottery scam when she sent $36,000 in payments on "fees and taxes" to get her "winnings" out of customs and across the border.
Pruitt said the story precipitated an explosion of calls with questions and complaints about foreign lottery scams.
"One of these things says you are one of 17 people chosen around the world. Well, I'll get 17 calls in one day once these things hit the mail," Pruitt said, chuckling. "If you're one of 17, they're all right here in Decatur."
Call — don’t guess
Whom to contact if you suspect you're being scammed: The Better Business Bureau, 355-5170. Its Web site, www.bbb.com, includes a search engine that looks up complaints against businesses by name, representatives and phone numbers. Phonebusters, an organization similar to the BBB, works to shut down scam artists in Canada. Phonebusters can be reached at (888) 495-8501.
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