Remittances (Sending money)
The scam: Someone contacts or approaches you and says they
represent a company that can help you send money to a loved one in Mexico.
After giving them your money you find out the company does not exist and cannot
be located anymore.
Tip: Do not trust strangers who tell you they can help you
send money. And never send cash by mail. There are many options for sending
money to other countries:
Money transfer companies: Although the money is transferred
fast, money transfer companies have higher fees. Check out all the options and
compare the charges, as well as the exchange rate.
Banks and Credit Unions: They may offer checks, debit cards,
electronic transfers and rechargeable stored value cards. (Watch out: It can be
very expensive to wire money from a U.S. bank if the bank does not offer a
special program to help immigrants send money overseas.)
Post Office: In general, they offer money orders. Special
low cost wire transfers may also be available.
(Source: “How to Send Money Home” - Consumer Action – 2013)
What you need to know:
Wiring money is like sending cash: once it is sent, you
cannot get it back. The same is true for pre-paid money cards (such as loadable debit or credit cards) or popular gift cards. Con artists often demand that people wire money or use some kind of pre-paid money cards because it is nearly impossible to reverse or track the money.
Never wire money or provide information from a pre-paid money card to strangers or someone you have not met in
person. That includes:
Sellers who insist on wire transfers or pre-paid money cards for payment.
An online love interest who asks for money as a favor.
Someone advertising an apartment or vacation home.
Someone who claims to be a relative or friend in crisis,
often in a foreign jail or hospital, and wants to keep it a secret from the
Never agree to deposit a check from someone you do not know
and then wire money back. The check will bounce, and you will owe your bank the
amount you withdrew. By law, banks must make the funds from deposited checks
available within a day or two, but it can take weeks to uncover a fake check.
It may seem that the check has cleared and that the money is in your account.
But you are responsible for checks you deposit, so if a check turns out to be a
fake, you will owe the bank the money you withdrew.
Lottery and sweepstakes scams
The letter says you just won a lottery. All you have to do
is deposit the enclosed cashier’s check and wire money for “taxes” and/or
“fees.” Regardless of how legitimate or convincing the check looks, it is no
good. When it bounces, you will be responsible for the money you sent.
Someone answers the ad you placed to sell something and
offers to use a cashier’s check or corporate check to pay for it. But at the
last minute, the buyer (or a related third party) comes up with a reason to
write the check for more than the purchase price, asking you to wire back the
difference. The fake check might fool bank tellers at first, but it will
eventually bounce, and you will have to cover it.
You meet someone on a dating site and things get serious.
You send messages, talk on the phone, trade pictures, and may even make
marriage plans. Soon you find out that your new companion is going to Nigeria
or some other country for work. Once there, they need your help: can you wire
money to tide them over temporarily? The first transfer is usually small,
followed by additional requests for more and more money. Relationship scammers
use other reasons for needing your money: to help get money the government owes
them, to cover costs for a sudden illness or surgery for a son or daughter, to
pay for a plane ticket back to the U.S. – they always promise to pay you back.
You might get documents or calls from lawyers as “proof.”
But as real as the relationship seems, it is a scam. You will have lost any
money you wired, and the person you thought you knew so well will be gone with
Mystery shopper scams
You are hired to be a mystery shopper and asked to evaluate
the customer service of a money transfer company. You get a check to deposit in
your bank account and instruction to withdraw the amount in cash and wire it,
often to Canada or another country, using the service. When the counterfeit
check is uncovered, you are on the hook for the money.
Online purchase scams
You are buying something online and the seller insists on a
money transfer as the only form of payment that is acceptable. Ask to use a
credit card, an escrow service or another way to pay. If you pay by credit or
charge card online, your transaction will be protected by the Fair Credit in
Billing Act. Insisting on a money transfer is a signal that you will not get
the item or your money back.
Family emergency or friend-in-need scams
You get a call or email out of the blue from someone
claiming to be a family member or friend. They need you to wire cash to help
them out of a jam – to fix a car, get out of jail or hospital, or to leave a
foreign country. But they do not want you to tell anyone in the family.
Unfortunately, it is likely a scammer using a relative’s
name. Check the story out with the people in your family. You also can ask the
caller some questions about the family that a stranger could not possibly
Apartment and vacation rental scams
In your search for an apartment or vacation rental, you find
a great prospect at a great price. It can be yours if you wire money for an
application fee, or security deposit, or first month’s rent. Once you have
wired the money, it is gone, and you learn there is no rental. Scammers have
hijacked real rental listings, changed the contact information, and placed the
altered ad on other sites. Or, they make up a listing for a place that is not
for rent, or does not exist, and use below market rent to lure you in.
If you are the one doing the renting, watch out for the
reverse: a potential renter sends you money to secure the apartment and then
wants to cancel. The phony applicant’s goal is to get you to wire the money
back before you realize the check they sent you was a fake.
Advance fee loan scams
You see an ad or website, or get a call from a telemarketer,
that guarantees you a loan or a credit card regardless of your credit history.
When you apply, you find out you have to pay a fee in advance. If you have to
wire money for the promise of a loan or credit card, you are dealing with a
scam artist: there is no loan or credit card and you will never get back the