Buying and selling items online is a common practice for many people these days. Unfortunately, scammers have gotten very good at taking advantage of the trust that people place in cashier’s checks and money orders as a means of payment.
For example, I recently met with a client who received a cashier’s check as payment for an item that client was selling on the internet. Seller took the cashier’s check to his local bank, cashed it, and got back $2,500.00 in cash. Before Seller had even gotten around to mailing the item in question to the Buyer, the Buyer contacted Seller to tell him that Buyer had changed his mind and no longer wanted to purchase the item. Seller, being the honest guy that he is, agreed to refund the $2,500.00 to Buyer. Buyer insisted that Seller send the payment to Buyer via wire of funds through Western Union. Seller did so, and shortly thereafter, his bank informed him that the cashier’s check was fraudulent and Seller needed to reimburse his own bank the $2,500.00 that they had paid to Seller. Needless to say, the Buyer received the wire for $2,500.00 and is long gone with those funds.
Unfortunately, it is Seller’s responsibility to pay back the $2,500.00 to his bank the Buyer just scammed from the honest Seller. While Seller has reported the above situation to the police, the chances of identifying the real identity of Buyer and collecting his money are extremely low.
Keep the following tips in mind to protect yourself when buying and selling online:
1. Cashier’s checks and money orders are not entitled to any special degree of reliability. Unfortunately, they are just as easy to forge as anything else.
2. There were some red flags here: Buyer changed his mind after sending a cashier’s check, and then insisted on being repaid via wire through Western Union = shady.
3. If you’re going to rely on a cashier’s check, a personal check, or a money order, make sure to wait at least seven (7) days to confirm that they have cleared your bank.
4. Be extra wary if you’re dealing with an out of state buyer.
5. Use PayPal, Western Union, or some other reliable go-between to handle the payments. Otherwise, you take the risk that the form of payment used is reliable. That’s the lie behind this entire scam: “you can safely rely upon a cashier’s check.”
6. Don’t count on your bank to back you up on this. They won’t.
7. Don’t count on the police to be able to track down the equivalent of an internet ghost. They can’t.
8. There is no “internet police” that handles this kind of stuff, and the website that you used when you found this buyer is not going to ride to your rescue.