Attempted scams and cons detected in Philip

by Del Bartels

After “hardly ever hearing about a local case until about six months ago,” Rick Palecek, vice-president and comptroller of First National Bank in Philip, has seen three scam attempts in one week. “Lately, our own customers are experiencing these rip-offs.”

A bank that is made aware of a fraudulent operation will alert other banks about the illegal scheme. The Philip bank receives three to four notices per month from a crime-network-warning-system, but this is the first time the subject of those notices has actually been seen in Philip.

One of the three potential victims received a hand-addressed envelope in the mail. Inside was a very official-sounding form letter urgently proclaiming that he had won money through an “International Promotions Program.” After contacting the phone number given in the letter, he was told to send a processing/clearance fee of $22,000 in order to then receive a total of $55,000.

Trying to gather as much information as possible before turning the letter in as a hoax, the wary person stayed on the phone line, which was a cell phone. The con-man on the other end said that a money transfer had to be sent through Western Union and that the recording number of that transaction had to be given to him through a second phone call.

After the friendly but not informative conversation, the letter recipient checked with the First National Bank. Palecek said, “This customer had called me earlier, wanting me to see the letter – to tell him just how bogus it was.”

A second local person recently received a similar offer in the mail. He was somewhat knowledgeable on how to deal with it, since he had in the past received unsolicited telephone calls based on the same scheme. The letter declared that he had won $25,000 in the Canadian Lottery and that a preliminary check for $4,900 was enclosed. The target of the scam was to first cash the check, then wire the amount of his share of the required taxes and handling fees to the agency sending the letter, then he would get the rest of his winnings.

“Though $4,900 had me going for a little bit – that's a pretty good amount of money – I knew it was a scam,” said the thief’s target. After calling the bank to say he was coming in to see “if this check was worth the paper it was printed on,” they called the phone number listed in the letter. The phone number was not available at that time, and later it was no longer in service.

The check “looked extremely real, even felt like the real thing,” confirmed Mitzi Boyd, cash management and new accounts of First National Bank in Philip. The check was written using a valid bank code, even a valid bank routing number, but matched no real checking account. “We have a banking procedure that can investigate if a check is valid, and we do that for our customers at no charge,” said Boyd.

By the time the check is discovered as fake, the electronic transfer could already be completed and the thief would already have his victim’s money.

Boyd warned that in a year’s time well over half of all Americans will probably receive a written or phone version of a scam. “One possible victim might wonder who would ever fall for such a scheme, then the next 20 people who open the letter totally fall for it. I didn’t know if we would ever see these things here in Philip, but sure enough here they are,” she said.

Older people on an extremely fixed income who sign up for sweepstakes and lotteries are the hardest hit victims. “If a group or organization is awarding you money for whatever reason, and they want money from you, then 99.9 percent of the time it is bogus,” explained Boyd.

The bank has been sending a small insert in its statement notices. This particular insert is appropriately titled, “If it sounds too good to be true, it probably is.” The insert begins with, “If someone you do not know wants to pay you by check but wants you to wire some money back, beware. It is a scam that could cost you thousands of dollars.” The pamphlet then lists the best ways to confirm if a financial transaction is sincere or a fraud.

Banks can send money electronically from bank to bank. The money recipient must be a known bank customer or have solid identification, and must endorse the transfer so a paper trail can be followed. Western Union, or any such money transfer company, sends from and to their own company. Though the voice recording that answers Western Union’s 1-800 telephone number warns of fraudulent money transfers, Western Union seems to be the method of choice by con-artists. But cheats and thieves do not limit themselves to just Western Union.

The Attorney General’s office warns, “If you wire any money, you may forever lose all such money. Remember – never wire money to someone you do not know. Once you wire money, it is untraceable and irreversible.” Never give anyone vital information over the phone, such as checking account or social security numbers.

In this modern day and age, almost anything can be forged. Palecek stated that checks, cashier’s checks, traveler’s cheques, and even money orders can be faked. The bank in Philip often calls other banks to verify all types of checks.

If someone receives an offer that could be a scam, contact your bank, the post office, and the South Dakota Division of Consumer Protection at 1-800-300-1986.

“We, as tellers, really watch to protect our customers, especially the older clientele,” said Debbie Hansen, head teller at First National Bank in Philip.

Boyd echoed this, “Though banks are in the business of transferring money, most banks question (though not to be snoopy) anything that gives signs of being a fraud.”