How money-transfer scams work

How money-transfer scams work

I've been half-heartedly looking at bicycles lately. Part of me pines for a new city bike, but the rational side of my brain knows that I have two decent bikes already. Still, I've killed a lot of time by paging through the Craigslist bike ads.

At the top of every ad is the following warning about scams:

I've always wondered exactly how these scams work, but I've never taken the time to look it up. I have no plans to wire money to anyone in Nigeria, so what's the big deal?

Recently on Ask Metafilter, though, a user named PowerCat posted a question about his friend's new “job”. PowerCat writes:

Basically, this “job” involves my friend receiving very specific money transfer requests from some dude he found on Craigslist. He gets a transfer, sometimes Western Union, sometimes an Interac or email transfer, he then has to cash it and transer it to someone else. The guy usually wants this done within the next hour or so.

The guy explained that what he's doing is getting clients to buy gemstones over the internet or something, then he has to transfer it in my friend's name and then he has to collect the money and transfer it to some other person (a Nigerian!).

Is this some sort of money laundering scam?

The consensus is that yes, duh, this is a scam. PowerCat's friend may be making easy money right now, but he's going to be screwed as soon as the banks catch on. Apparently, this is exactly the sort of scam that gets perpetrated on Craigslist. An AskMetafilter user named koeselitz posted an awesome explanation of how this internet money scam works:

This is most likely a fake-check-cashing scheme. Check-cashing scams are popular on Craigslist. […] So: if the money's coming from a Canadian bank, but the scammer is in Nigeria, who is sending you money? Most likely you are only one of two people being scammed; probably the other person is being sent physical fake checks and being asked to cash them and wire the money to you.

This is a variation on a very common Craigslist scam. It's much sneakier, however; in the average fake-check scam, what happens is:

  • Scammer has some pretense to send a check (e.g. ‘I'd like to buy the bike you listed on Craigslist, but I'm visiting Africa and won't be back for a few months…')
  • Scammer ‘accidentally' writes the check for WAY too much ($1000 too much) and begs a favor: ‘could you cash the check and mail the change back to me? If you do, I'll let you keep $200!'
  • Happy dupe goes and cashes the check, keeps the $200 that the ‘generous' scammer offered, and sends cash back.
  • Two days later, he is contacted by his bank, who says that the check was fake and that he owes them $1000.
  • Someone cries himself to sleep every night for the next month.

This scam, while pretty successful, has one tough point for scammers: it's hard to for them to convince somebody to mail them cash sight-unseen, especially when the address is in Nigeria. I imagine they lose a number of people when they ask for that cash to be mailed back, although, again, they're pretty successful.

The rest of koeselitz's explanation is too long to reprint here. But if you've ever wondered how these internet money scams work, I encourage you to spend a few minutes reading the entire post.

Remember folks: If it seems too good to be true, it probably is. In the real world, you don't get “something for nothing”. Be careful out there. (And for more information, check out the Craigslist “about scams” page.)

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hustler
hustler
11 years ago

I’ve always wondered about that too. There were some “jobs” posted on craigslist that involved cutting and pasting ads into craigslist. But the ads seemed to be of that nature…”I’ll wire you money, cash this check, put this in your name and then sell it back to me…” If it seems too good to be true it probably is. And if it seems fishy at all, it probably is.

CL
CL
11 years ago

Another major scam that keeps popping up over and over again on Craiglist is “Data Entry” positions.

In this scam, they request money for the data entry “equipment” and promise to pay you lots of money for entering data. Instead no equipment arrives and your payment is gone.

Dylan
Dylan
11 years ago

Cockeyed.com posted a great explanation back in March called “Investigating the Process of a Craigslist / eBay / MoneyGram Vehicle Scam” http://www.cockeyed.com/citizen/accord/craigslist_fraud_outlined.shtml

It’s very well explained for a humor site. And there is even a follow post about one of his readers that was duped by the same scam on Craigslist.

If it looks too good to be true, keep looking and you will eventually figure out why.

bethh
bethh
11 years ago

I had a friend who almost got taken in by one of these. She rents a room in her home by the day or month, and someone reserved one weekend and arranged to send a check. Then they called and said their company had sent her a check for 4x the proper amount, because they messed up the work expenses reimbursement, and could she just send a check for the difference? Fortunately she thought to call the company that issued the check in the wrong amount, and found out it was a fake. (Of course if she’d mentioned it to… Read more »

RB @ Richby30Retireby40
RB @ Richby30Retireby40
11 years ago

Whatever you guys do, DO NOT trust a seller who wants you to go through an ESCROW. If an advertiser is pricing way below fair value, beware. The market is efficient, and that price should not be there. Gramatical errors and ridiculous names are other dead giveaways.

JD, why you looking for another bike if you already got 2? Don’t do it! Sell one first, experience the ease or difficulty of it, and then decide in spending the bucks on another bike. 🙂

Best,

RB

Mark
Mark
11 years ago

Recently my wife put up our PSP on Craigslist. A guy was interested and wanted this for his kid, but he was out of the country. He offered to pay way too much for it (red flag) and pay for shipping to Nigeria (red flag). He says he’ll pay through Paypal. Not having all the details my wife tells me he’ll pay through Paypal, so I told her to send him my email address, so he get us the money. So I get an email from the gentlemen, thanking me and asking that we wrap, so he can give it… Read more »

KS
KS
11 years ago

I’ve even encountered this thing on local sales. I posted something for my parents on their local Craigslist and specified cash only, etc. Some guy wrote what was clearly a boilerplate msg saying he would pay me extra to “hold” it. I figured a fake check wouldn’t be far behind.

Kevin@OutOfYourRut
11 years ago

Unfortunately, these scams are growing with the unemployment rate. If you’ve been out of work for a few months and funds are getting low, you might be tempted to take a stab at it. I think that’s what the scammers are relying on. There’s a lot of good stuff on Craiglist, but there’s no small amount of this crap either. It also seems to be a general rule that if a “job” offers to set you up in their plan in order to make money, it’s a scam by default. Unless you’re actively driving the inflow of income, you have… Read more »

RB @ Richby30Retireby40
RB @ Richby30Retireby40
11 years ago

Also, if there’s no phone #, along with a name for a bigger ticket item, forget about it. If they say they are travelling overseas and can’t be reached, forget about it.

That said, I’ve bought and sold 7 different cars on CL (13 transactions) in the past 8 years and have had all positive experiences. In fact, I buy and sell everything on CL. 95% positive.

Rgds,

RB

E
E
11 years ago

I use craigslist all the time and would agree that it’s 95% kosher. I’ve only encountered one scammer, and when I told him I wasn’t going to ship a washing machine across the country for any amount of money he left me alone. 😀 I also ignore anyone who can’t spell or isn’t local.
It helps that I don’t trust anyone, ever. 😉

Yadi Ikechkuwu
Yadi Ikechkuwu
11 years ago

Lucky you. Scam when it comes to real established Nigerian scammers is beyond logic it has gone from being called yahoo yahoo to yahoo plus. Just be careful and if you believe in God, pray that you do not fall into the hands of those kinda guys thats all.

Save yourselves credit card problems by using highly secure passwords – not your dads name or child’s birthday. Shop only with known merchants or your credit card details will wind up on some credit card list somewhere on the internet for all to copy and use.

Mike
Mike
11 years ago

I recently tried selling a car on Craigslist. I got 2 emails from scammers. Too bad I deleted them.

Erica Douglass
Erica Douglass
11 years ago

Watch out for landlord scams too. When you’re looking for a place to live on CL, sometimes you’ll see one that looks too good to be true. They never list a phone number and their email address is usually of the variety [email protected][common web email service.] One dead giveaway is they never use craigslist’s email routing. When you email them, they will email back and say they are in Africa or somewhere far away for a while, but you can look at the house and send them a deposit if interested. Yeah right! A similar scam was happening locally here… Read more »

Tyler@Frugally Green
11 years ago

I’m another very happy Craigslist buyer and seller. I’ve even sold a few things that I shipped. Here are a few rules I live by: 1. Never accept anything but cash for a local transaction. The only exception I make to this is if it’s a small item and I get a copy of their driver’s license in exchange for a check. I would never do this for a big ticket item. 2. For out of state transactions, if they’re willing to send a check and wait for it to clear before I send the item, no problem. Otherwise, Paypal… Read more »

WereBear
WereBear
11 years ago

What these scanners rely upon is the lure of easy money. I know someone who was selling puppies and got a too big check, with the same excuses about maybe they’ll have it shipped, which she didn’t want to do, so he asked for a check to be written back to him. Turned out it was a fake money order. So don’t trust those until they clear.

Micheal Hall
Micheal Hall
11 years ago

@RB @ Richby30Retireby40 Internet Escrow can be useful – just choose your OWN escrow, don’t go with what the seller suggests (if they do). I bought a high end photographic lens from South Korea some years ago via eBay. Though the seller had a great history on eBay, I requested an escrow arrangement and I chose the escrow company. Anyway, escrow accounts can be useful – particularly for large ticket items you want to be sure of receiving. There have been scams surrounding internet escrow accounts – mainly those were ones which the seller suggested. They were not escrow accounts… Read more »

Not My Mother
Not My Mother
11 years ago

It’s also worth pointing out that with the money laundering scams where you receive money in your bank account then have to pass it on, you can be prosecuted for taking part. And you probably will. I work for a bank and we have quite sophisticated ways to highlight new unusual activity on your account. Beware.

RainyDaySaver
RainyDaySaver
11 years ago

Sometimes I wonder how people get taken in by these scams.

karla
karla
11 years ago

Who sends cash in the mail?

Well, besides my in-laws, as Christmas presents..and part of that was stolen out of the envelope, although I can’t prove it because I didn’t tell them the envelope arrived open already when I thanked them. So I don’t know how much was in it to start with.

But again, who would put cash in the mail, to a stranger????

Allison
Allison
11 years ago

My mom almost got taken in by one of these scammers on ebay. She put in a couple bids on an item. Then she got an email from the “seller” saying she could have it at the buy it now price if she sent the “seller” a Western Union check the next day. She said that sounded great and asked for the Western Union info, which he gave to her. Lucky for her she checked back on the item the next morning and the bidding hadn’t been closed. That’s when she contacted the actual seller and realized she had been… Read more »

adela
adela
11 years ago

Guys, what you are commenting are about the internet and money scams. I am novice to this virtual transaction; But i applied and got hired with the advertised job from craigslist. My boss referred me to odesk and i was invited for a new and first assignment. I worked hard as virtual assistant (or cal it admin assistant), even late at night_ just to understand the videos of instructions given. The efforts was extreme, because,I consider much the work as treasure to me, for i am the only one working in the family__ it’s for survival. after two weeks, I… Read more »

Allison
Allison
11 years ago

My mom almost got taken in by one of these scammers on ebay. She put in a couple bids on an item. Then she got an email from the “seller” saying she could have it at the buy it now price if she sent the “seller” a Western Union check the next day. She said that sounded great and asked for the Western Union info, which he gave to her. Lucky for her she checked back on the item the next morning and the bidding hadn’t been closed. That’s when she contacted the actual seller and realized she had been… Read more »

jessieimproved
jessieimproved
11 years ago

I recently posted a desk on Craigslist, and got this email from one “dav clinton” (name already suspicious):

“Good day,
I’m interested in the item you placed on craiglist and I’ll like to know if its still available for sale so that i can come and look and pick it up if I’m pleased with it.”

Bad grammar and no actual mention of the item I was selling – I didn’t even respond.

Chetan
Chetan
11 years ago

While we’re on the subject of Nigerian scams, you must have a look at this page that details how someone “scammed a scammer”

http://www.419eater.com/html/booked.htm

The entire site is devoted to these experiences.

Kevin M
Kevin M
11 years ago

Tyler (#14) has it right. Keep it simple when using Craigslist. I’ve done it a few times and always meet in a public place (usually a well lit gas station or fast food joint) and insist on cash. Otherwise, it’s not worth the hassle.

Can’t believe people fall for this stuff still after all the stories out there in the media and online.

Honestb
Honestb
11 years ago

My friends nearly got caught in a similar scam from this. They were listing a room for rent, and this guy from England with a sick mother was going to send them a check.

Presumably, he would then have asked them for the cash back right after he sent it, having changed his mind or whatever, but they googled his name and someone had posted on craigslist in montreal a scam experience.

Matt aka Your Friendly Neighborhood Cheapskate
Matt aka Your Friendly Neighborhood Cheapskate
11 years ago

I actually enjoy “playing their own game” with these crooks. As a matter of fact, not too long ago, I had a guy from “Africa” send me 3 checks before he finally gave up. Each time, I reported that I had never received it. It was blast!

Cici
Cici
4 years ago

you’re so funny

Paul in cAshburn
Paul in cAshburn
11 years ago

@Matt #27.
Some of these folks aren’t just scammers, they’re connected to gang activity or other organized crime. Toying with them could bring unforeseen calamity at unexpected times and places. Recommend you just ignore – or report to authorities – anything you think is a scam…

trb
trb
11 years ago

Holy cats (to use JD’s term), that 419 eaters website at Chetan #24 was unbelievable. People on both sides of this issue waste far, far too much time looking to screw one another. Of course, now I’ve just wasted plenty of time reading the story…

JKC
JKC
11 years ago

Nothing beats an old Raleigh 3 speed for commuting. I have a 1974 model that I bought reconditioned from a hard-working, locally owned reconditioner of old bicycles. http://www.bikeville.com/ Check out the photo of the van on their homepage.

It is also a great business model: Buy nice old bikes at flea markets for cheap, invest some sweat and parts to make them mechanically sound, and re-sell them for $100-$200. Usually they come with a mechanical guarantee from the shop.

I’m sure Portland has such a shop. Most big cities do.

Happy cycling!

Dee Jay
Dee Jay
11 years ago

It’s a shame that scammers have ruined Western Union for the rest of us. PayPal in my country will only take you with a credit card (and not one of those pre-paid ones you buy, a proper one). You can add debit accounts, but you must have a credit card to get started. For seven years, while I recovered from heavy debts, I had no credit card, and therefore no PayPal. Fortunately, this was in the early days of eBay before the Western Union scams got started, so I had no problems buying and selling via Western Union. In e-commerce… Read more »

David
David
11 years ago

Here is an example of a scam that was tried on me while selling a bike on craigslist. Scammer: Hello, I was fortunate to spot your advert on the net and I like to know if it is still available for sale.If Available,please get back to me with the following enquirers: Are you the first owner? Any accident…….. Last price?…. Present condition?…………… Pics?……… Best Regards, Owen……… Me:yes its still available 2nd owner last price? i lowered from 725 no accident, condition is good the pics on craigslist are the ones that I currently have Scammer: Thanks for the response.I have… Read more »

poorcollegestudent
poorcollegestudent
11 years ago

my boyfriend almost got scammed on an ad for a dog in the local newspaper. there were pix and all. but once i asked about the lady and wanted to see the emails i picked up on the scam immediately. i could tell that the person writing the email was not a native because of the bad grammar, even tho she had supposedly just moved to africa for missionary work. i started googling her name and phone and came upon a website where someone had posted the same email my boyfriend had received saying the puppies were free, but we… Read more »

Stephanie
Stephanie
11 years ago

My brother in law got scammed. He was selling his drum set and someone emailed him saying they would pay for it and pay for it to be shipped to the states. So the guy sent a cheque and once my brother in law had cashed it the guy said he wanted the money back. My stupid brother in law didnt wait til the cheque cleared and sent the guy the money only to find out the next day that the cheque was no good. He blamed the bank and the news was going to do a report on it,… Read more »

Donna Freedman
Donna Freedman
11 years ago

I manage an apartment building and when I put ads on Craigslist I often get scam replies. It’s always from someone living overseas who will be moving here for work and will have “an associate” already in the States check out the place.
What’s amusing is that many of these scammers use the same template! You get identical stories, almost word for word.

Steve in Denmark
Steve in Denmark
11 years ago

A while back, my wife had a strange experience. She started getting emails from friends asking why she was out in Nigeria. Then I got an email from ‘her’. From her old Hotmail account. In it it said she had gone out to Africa to do some work with the needy folk out there. She’d had a problem, can’t quite remember if it was because she’d been robbed now, but anyway, she’d lost all her money, had none to get her back here (to Denmark, though they didn’t specify where) and would we send some money over to her asap.… Read more »

kelly
kelly
11 years ago

If you have a question on whether or not a check is fraudulent then just ask your bank. They can examine the check and do the research to make sure it’s legitimate.

2cool2hurt
2cool2hurt
10 years ago

I had an experience with this company called OICO Fund Management. The scam is so packaged that you won’t suspect anything. They have an intranet for their supposed employees and a public website (which looks so elegant but doesn’t contain much). Basically, they got my info from Yahoo Hotjobs and contacted me for a customer service position in the company. After the long recruitment process, they gave me a training packet where I found out that my primary duty was to transfer money from one account to the other. I wasn’t comfortable with this and told my ‘supposed’ manager that… Read more »

mets670
mets670
10 years ago

To:2cool2hurt:
I got the same email.Did they want all your banking info.as one of the last steps in the process?When you didn’t here from them they didn’t get into your account did they?Your the only comment on this company. usually there many of them.I wonder if these people just set up this mirror company and its so new that even the real company hasn’t realized it yet.I notice by the date of your message that its really new. please email me back at:[email protected]

Thank You,
Mark

Sally
Sally
10 years ago

My son got an offer through Craig’s list to be a personal assistant to someone who lives in Australia most of the year. He wants him to take this money order/check to his bank and deposit it, then withdraw the money the same day and send all but $100 to somewhere in Turkey. I’m afraid my son is going to fall for this and I’m afraid it’s a huge scam. How do I convince him that he will lose his money in the end?

RJ Koehn
RJ Koehn
8 years ago

Currently dealing with a relative who has been caught up in the Nigerian money scams for a number of years. Lots of money sent overseas. Said relative is currently waiting for money to be wired to a checking account with the instructions from Barrister Steven to wire $1,000.00 increments to three different individuals in Nigeria. A closer look shows all three folks live in the same town in Nigeria with area code. Waiting to see if wire actually shows up in the account but have already notified the bank to red flag anything that comes thru.

L
L
8 years ago

Is picking up western union money and resenting it back to over sea as money laundering ????

Thrasher4
Thrasher4
5 years ago
Reply to  L

Yes,it is money laundering!

Yaofeng
Yaofeng
8 years ago

I wonder if Paypal is an effective way to filter such money scams. I have just responded to a (potential) scammer to paypal me with the amount for the product he is interested in getting (in this particular case rent). Will see how it turns out.

Jose
Jose
4 years ago
Reply to  Yaofeng

For the guy who asked if using paypal would avoid this sort of scam. Paypal is filled with scammers.. they might be a different subset or “specialty” but basically the same sort of thing. Worse is that with paypal, it is easier for them to have you believe they are legitimate for a longer period of time. They have about 6 months before they pass the time limit allowed by paypal to “chargeback” and basically yank all that money back leaving you in negatives.. so whatever service they convince you to do, or stuff they buy, or money you send… Read more »

CB Holmes
CB Holmes
8 years ago

I myself actually fell for a money transfer scam TWICE. I guess I knew in the back of my mind it was all a scam but I continued anyway. I was sent two checks. One for 2,550 and one for $1,950. I was totally screwed on both. The 2550 bounced due to “closed account” and the 1950 was a fake check. So my Bank account was in major trouble. It took all my WEDDING savings ($1100), my mother giving me $700 and all my cash savings ($1710) to bring me up positive. This was very recent and I am still… Read more »

mello
mello
6 years ago

I responded to an add on craigslist for restaurant work and got a response that they didnt need anyone else for those positions but they were in need of mystery shoppers. I received a check for $1950 and I was supposed to deposit it in my account. They kept texting me asking me when the money would be ready and when I said 7 days the texts stopped because they figured my bank would catch on by then. Anyway I was supposed to keep $400 for myself then go to Walmart and spend $50 in the electronics department and observe… Read more »

Thrasher4
Thrasher4
5 years ago
Reply to  mello

They can’t cancel the check once it’s deposited! The check cleared your bank but hasn’t cleared BOTH banks! It can take months for a check to clear BOTH banks. You could bait the scammers! I tricked scammers into emailing me bank accounts. I tell them I won’t wire the money western union but I will wire the money by direct bank transfer. I had some of the bank accounts flagged and closed.

Daynkaymom
Daynkaymom
5 years ago

I usually see the ad’s that say this job is based around your schedule you tell me how many hours you want to work and what days and we’ll go along with it stuff

Kornelia Gray
Kornelia Gray
5 years ago

What are you going to do if you send the money and later you found out is scam?

Shana
Shana
4 years ago

I ran into a person who called themselves “Trissy Smith” on a local chat site, this person wired me $1,600 and i was supposed to forward it elsewhere via WU. Well, when “Trissy” informed the funds were ready to be picked up at a MoneyGram location, i picked it up and kept it. “Trissy” threatened to report me to the police but i knew better.

The Mistic Man
The Mistic Man
4 years ago
Reply to  Shana

Hello, how sure are you that he is a scam and how long has that been since he contacted you?

country girl
country girl
4 years ago

question whether or not this would be a scam. I met someone on a AYI date site couple months back and his work consisted of traveling supervising building construction. He applied for a 2-week job in Nigeria on new expressway then intended to go to his home in Idaho. While working in Nigeria on this expressway there was an onsite accident putting a couple people in hospital. He can’t leave until he pays $4800 additional damages to what he already paid as they held him responsible for the accident. Contract people taking care of food and hotel and flight home,… Read more »

Dopamine
Dopamine
3 years ago
Reply to  country girl

they want to keep it in the same bank

junior
junior
3 years ago

Some guy guy me up and told me I can make some money. He said send him $100 and he’ll send me $800+ but I don’t understand how he makes money. All of this is through Western Union. I think he had a inside man what do you think

David
David
3 years ago
Reply to  junior

Did u get the $800??

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