Beware of free advertising websites

Started by steve, September 12, 2010, 18:20:45

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All free advertising sites for timeshare could get you into a financial debt.
This is a email that was sent from David King.


Good day,
Thanks for your reply and assistance so far. I have  concluded on the payment arrangment of the timeshare.
However,A certified cheque of  3,000 pounds  which  will be sent to you,that will cover your payment  and also the closing cost fees,recording fees,transfer of ownership ,tax and other commission charges.

I will have to instruct for the cheque to be sent to you , so that when you receive it you will cash it deduct the cost of your Timeshare 1,400 pounds  and wait for instructions on how to use the refund which will be sent to the agent for the closing arrangement.So confirm this and provide me with the following below:

(1) YOUR FULL NAME (name on cheque)
(2)ADDRESS (for cheque delivery)

for payment to be delivered to you.
Please remember that this transaction requires prompt response.

The Overpayment or Advance Payment Scam is the most common form of fraud encountered in on-line sales of goods but has also been the means of fraud in some timeshare scam cases. It is based on a fundamental misconception about how cheque clearing works and the meaning of the phrase 'cleared funds'.

When a cheque is paid into a bank account it has to be fully verified before the funds can actually be credited to the account. Even in this day-and-age this means that the actual physical cheque has to be returned to the issuing bank for full authorisation for the funds to be credited. If any anomaly is discovered at this stage, the entire transaction is cancelled.

What this means in practice is that when you pay a cheque into your account your bank will do a preliminary enquiry about the issuing account and then (because of the pressure from the public to clear/credit funds more rapidly) will credit the funds to the recipient account within typically 6-8 days.

Many people, in fact most of the general public, will then regard these funds as having 'cleared' and even banks refer to the credit in this way. The problem is that until the physical cheque is returned to the issuing bank and is then checked the entire transaction is in question.

If the issuing bank finds the cheque to be fraudulent in any way (forged or stolen cheque, false signature , altered amount etc.) the credit does not take place, the recipient bank is informed and the initial credit to your account is reversed (the seemingly cleared funds vanish). This process can take weeks.

This means that there is a window of opportunity for fraud from the moment that the funds appear to clear and the transaction reversal weeks later because you think you have money in your account that is not actually there!

(Beware - One UK bank is now claiming in advertisements that "your money will start to gain interest from the day you pay your cheque in ". Please note that even MORE care should be exercised here! This statement does NOT mean that the cheque is cleared or will clear more quickly! The clearing and authorisation processes are still exactly the same and take the same time. It just gives a longer period during which you are susceptible to the fraud.)

The Overpayment or Advance Payment Scam uses this misconception of 'cleared funds' for fraudulent purposes by requesting repayment of these 'ghost' funds during the period of susceptibility. There are many variants in how the fraud is presented but a typical form on classified sales sites follows this format:

An email response will be received by an advertiser offering to purchase the goods immediately at the asking price. It will ask the advertiser to confirm the 'the final price' and ask for account details so that they can arrange payment. (Beware of this request  it is in order to 'farm' your account details  not to empty your account but to be used for future stings  see later in this section)

Either in this email or a subsequent email there will be a query about whether you will accept a cheque/money order/bankers draft (which does not fit with their request for account details!) If the advertiser accepts this, an agreement is made to send the payment.

In due course the cheque/money order/bankers draft arrives. It is for MORE than the asking price (this may have been pre-warned or may be explained later.) This overpayment is explained in many ways:

Clerical error
Full amount includes commission
Includes a sum for shipment
Multiple goods being purchased with same cheque

In many cases the person who was previously the buyer says that they are buying the goods on behalf of a relative, friend or business associate to explain the fact that the cheque is not in their name and also the reason for the overpayment. They then explain the extra transaction required when the funds have 'cleared'.

The seller then deposits the cheque in their account and waits for it to 'clear'. A few days later they can see the funds apparently in their account. The buyer requests that the Overpayment be transferred back (if an 'error'), paid to the shipping company, paid to a third party for other goods etc.

This payment is requested by Western Union.

If the seller is completely taken in, they will then send these funds completely untraceably to the unknown recipient.

Days or weeks later they will notice that the initial credit for the cheque amount has vanished from their account and they are out-of-pocket to the value of the Overpayment.

(One nasty variant of this is that if the fraudster receives the Overpayment and still has time, they may go for the whole amount. They will invent a reason to cancel the purchase  a simple change of heart, serious family crisis, critical illness of purchaser, change in import regulations etc  and will request the return of the rest of the purchase amount. If pushed they may concede a small penalty for time-wasting. Again the funds have to be returned immediately by Western Union)

In either case what has happened is that during the 'window' the seller has been persuaded to send money they thought was in their account to an untraceable recipient: the payment instrument (cheque, money order, bankers draft) has been found to be fraudulent and the initial transaction cancelled and the apparent credit to the sellers account has been reversed.

Not only has the seller lost the transferred funds but they could also face a charge from their bank!

There are MANY variants in how this scam is presented but some features are constant:

The 'purchaser' agrees to the purchase without any of the checks or questions that would seem normal.

There is no quibbling about price.

Payment is arranged by cheque, money order or bankers draft.

The cheque is for more than the selling price (Note that some cleverer scammers send the correct amount but then rely on the 'cancelled sale' actions above to explain the funds return.)

Return of funds is requested shortly after cheque 'clearance' by Western Union or Moneygram. (Untraceable methods)

The attached email is an example which was recived by a classified advertiser just recently.

Is it really that widespread?
The Overpayment scam depends on high-quality forged cheques. A recent report claimed that in ONE DAY of interception in 2005 at Heathrow Airport, courier packages from Nigeria were found to contain over 20 million in forged cheques. A Customs and Excise check on only 220 packages from Nigeria in 2004 disclosed false cheques for over 46.1 million. ONE handbag intercepted at a parcel centre in Coventry contained over 1 million in forged cheques. Sellers have reported that scam responses can easily exceed the number of real responses to advertisements on some sites. It is VERY widespread and all sellers should beware

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