The Internet Has Opened the Door for a Whole New Generation of Scam Artists
by John Lawrence, April 4, 2018
Recently, I put an item on ebay for sale. Immediately, I got a message from someone who wanted to purchase the item. He texted me right away and wanted to know the price. I texted back and the whole transaction took place outside of ebay. He agreed to the price and said he'd send me a check for the amount I was asking plus shipping. Since the item was rather bulky, I didn't know about the shipping or have any idea how much it would cost. He said that, when the check cleared, then I could ship the item. I figured the sale was legitimate because, after the check cleared, the money would be in my account, right?
The check appeared in my mailbox overnight. We texted back and forth because he wanted to know when the check arrived etc. He gave me some instructions, which I didn't need about depositing the check. Evidently, he didn't want me to take it into the bank and deposit it with a teller. The first red flag was the size of the check - $1500. - more than the amount I was asking which was $400. So the check was for $1900. I asked why the huge difference, and he replied it was for shipping.
My daughter was a little skeptical. She had heard about cases where the amount deposited in a checking account was reversed later even after a check had cleared. I said I thought that once the check cleared that was it. The money was in your account and it was yours. I took the check into my bank and asked one of the bankers about it. She immediately noticed some discrepancies in the check. She even brought up a check from the same educational institution and pointed them out. For instance, the phone number had been eliminated. She said it was a bad check and not to deposit it. She said it was a pretty good copy job though. She said that, even if the check cleared, the bank could come back months later and take the money back out of my account. Also the bank would probably close my account at that point.
I texted my erstwhile buyer and said "deal off. My banker said it was a bad check." He didn't give up though. He kept texting me, insisting the check was good and to go ahead and deposit it. I didn't text back any more after I had said "deal off." I figured, if the check was legit, he could stop payment.
So, you might ask, how did this guy know the check would "clear" and what is the meaning of a check "clearing" if the money was not in your account once and for all at that point. I googled the meaning of "a check clearing." The way the clearing process works is that the bank where you deposit the check sends the check to the bank on which it was drawn. That bank then looks to see if the amount of the check is in the account corresponding to the account number as indicated on the check. There are three possibilities. First there may be no such account, and the check is returned and your bank informs you that the check has bounced. So the check does not clear. The second possibility is that the account on which the check was drawn is a valid account, but there is not enough money in the account to cover the check. So the check is returned, and your bank informs you that it did not clear.
The third possibility is that there is sufficient money to cover the check so the bank sends the money to your bank. It goes into your account, and the check has cleared. It's a done deal, right? Wrong! If the check was forged, in other words the check was not written by the account holder but some third party who had copied or stolen a check, the money could be taken out of your account months later when the legitimate account holder realized and proved that he did not write that check. The check was a forgery.
The third possibility was probably the case in terms of my buyer from ebay. Once the check cleared, it might take months before the accountant at the educational institution on which the check was drawn discovered the discrepancy. The money would have been taken out of my account at that point even though the check had "cleared." I would have shipped the goods after the check cleared, but my money would evaporate from my account some time later - all $1900. of it.
So how does the scam artist profit from this? He's gotten some free goods, yes, but I'm sure he wasn't interested in the goods I would have been shipping. It has to do with the $1500. difference between my asking price and the check he sent. The shipping would probably only have cost a couple hundred dollars. Then he would ask me to send him a check for the difference, in this example that would amount to $1300. He would cash my check and be $1300. richer. Some time later the amount of his check for $1900 would be taken out of my account.
There are other ebay related scams. One is a transaction for an expensive item like a computer laptop. The buyer pays for it inside ebay using paypal and then picks up the item in person. Deal done, right? The money's in the seller's paypal account, right? Wrong! The buyer comes back to ebay and says he never got the merchandise. Since there is no receipt or proof the item was delivered to the buyer, ebay's "Buyer Protection Program" kicks in. ebay sides with the buyer, and takes the money back from the seller's paypal account and gives it back the the buyer. Lesson? Always get a receipt showing the item was picked up in person. Have the buyer sign when he picks up the item. Most unsophisticated sellers won't do that.
Don't you love the internet, the way it has opened the door for all kinds of hackers and scam artists who have demanded and received ransoms from hospitals, screwed old lades out of their savings and generally screwed up all kinds of transactions including voting? Now with the internet of things, any hacker can get into your house since there's no security in the devices connected to your home. It's a free for all; it's the wild west. There are all kinds of opportunities to make a living or a killing. None of them are legitmate, of course, but with a little thought put in to how to cover their trails, the scam artists can get away scott free. In my case my buyer could have cashed my check, having opened an account with false ID, and then closed the account as soon as he had the money.
