The Hawai?i Island police Deartment has issued a warning to the public about scams known as “advance fee schemes,” in which the victim pays money to someone in anticipation of receiving something of greater value—such as a loan, contract, investment, or gift—and then receives little or nothing in return.
“In one recent case, a 62-year-old Kona woman received a check for more than $6,000 that appeared to be from a known legitimate bank. Along with the check was a letter claiming she had won money in a lottery and advising her to deposit the check into her bank account and then wire a fee to the sender. The woman was suspicious and took the check to her bank, where she learned that it was counterfeit,” noted the HPD bulletin. It noted that such schemes “can include claims of winnings, gifts, investments, loans or other proposed opportunities. The common factor is that the victim pays money to someone with an expectation of receiving something of greater value but doesn’t receive it. ”
According to FBI, “The variety of advance fee schemes is limited only by the imagination of the con artists who offer them. They may involve the sale of products or services, the offering of investments, lottery winnings, “found money,” or many other “opportunities.” Clever con artists will offer to find financing arrangements for their clients who pay a “finder’s fee” in advance. They require their clients to sign contracts in which they agree to pay the fee when they are introduced to the financing source. Victims often learn that they are ineligible for financing only after they have paid the “finder” according to the contract. Such agreements may be legal unless it can be shown that the “finder” never had the intention or the ability to provide financing for the victims.”
Those who receive a suspicious check should take it to their financial institution to verify its authenticity. Recipients of questionable checks should not send any fee money until the check clears the bank. In general, if receive a check from someone or some company you never heard of, or for a lottery or contest you never entered, you should consider it suspicious.
“The public should be particularly leery of companies that have only a Post Office Box number rather than a street address and don’t have a direct telephone line that is answered when called. The public is advised that if they are unfamiliar with a business they should check with the State Department of Consumer Affairs or the Better Business Bureau to see if it is legitimate and reputable,” advises HPD. Unfortunately, this may put businesses in many smaller Big Island communities at a disadvantage, since the post office doesn’t supply to-the-address mail delivery.
The FBI suggested the following tips for avoiding advance fee schemes:
- Know who you are dealing with. If you have not heard of a person or company that you intend to do business with, learn more about them. Depending on the amount of money that you plan on spending, you may want to visit the business location, check with the Better Business Bureau, or consult with your bank, an attorney, or the police.
- Make sure you fully understand any business agreement that you enter into. If the terms are complex, have them reviewed by a competent attorney.
- Be wary of businesses that operate out of post office boxes or mail drops and do not have a street address. Also be suspicious when dealing with persons who do not have a direct telephone line and who are never in when you call, but always return your call later.
- Be wary of business deals that require you to sign nondisclosure or non-circumvention agreements that are designed to prevent you from independently verifying the bona fides of the people with whom you intend to do business. Con artists often use non-circumvention agreements to threaten their victims with civil suit if they report their losses to law enforcement.