Fraudsters get away with these schemes by understanding how our banking system works. (Photo: REUTERS/Scott Morgan)
A not-so-new text message scam is making its way across Canada and it has already victimized 200 people this year to a tune of $2.2 million.
One of the scam’s latest victims is Louanne Cataford. The Montreal student received a text from an unknown Ontario number saying: “Get $300/week driving with our logo on your vehicle.” She then contacted the person in her text, who claimed to be the promotions manager for a legitimate European company. He told her that if she was willing to turn her car into a mobile billboard, she would receive $300 a week.
The fraudster sent her a cheque, for almost $4,000, told her to put the cheque into her bank account and then deposit the rest, in cash, to the bank account of the graphic artist who was to wrap her car in advertisements. He told her to keep $300 as an up-front payment.
The bank cleared the cheque after five business days, she deposited the money and then found out that cheque was fraudulent. Then her credit union told her she had to pay the money back.
In this case, the scammers used a legitimate company’s name and bank account to forge the cheque and access the funds deposited.
Fraudsters get away with these schemes by understanding how the banking system works and they know the five-day period is not for the benefit of the customer.
The clearance period only ensures that there are sufficient funds in a cheque issuer’s account from which money can be withdrawn but is not enough time to determine if a cheque is fraudulent.
Payments Canada, an non-for-profit organization which operates a payment clearing system, sets out rules which state that the bank has 90 calendar days to return a fraudulent cheque.
By the time the fraudster has received the money and the cheque is identified as fraudulent, he or she is well onto the next victim, and there seem to be no lack of victims. CBC News first broke this story and was then contacted by dozens of potential victims who received texts with the same offer, some of them on the cusp of depositing their cheques.
Unfortunately for bank account holders, they are responsible for all cheques deposited, including money lost due to fraudulent cheques that cleared through their accounts.
Though most people who fall victim to a scheme like this are on the hook for the money lost, Cataford got lucky. After CBC Montreal Investigates intervened, her bank agreed to reimburse most of the amount she lost.