Other Common Fraud Examples
Cheque fraud is among the oldest and most common forms of financial crime. Even with the advent of electronic payment products, cheques still account for billions of payments each year, making them a prime target for criminals.
There are three main types of cheque fraud:
- Counterfeit - cheques not written or authorized by legitimate account holder
- Forged - Stolen cheque not signed by account holder
- Altered - an item that has been properly issued by the account holder but has been intercepted and the payee and/or the amount of the item have been altered
- Reduce the use of cheques in favour of electronic payments such as wire payments, direct deposit and pre-authorized payments
- Choose envelopes that make cheques hard to detect while in transit. This helps to minimize the risk of cheques being intercepted
- Keep cheque stock in a secure location
- Destroy unused cheques from closed accounts immediately
- Checks and Balances - split responsibilities so that no one person is responsible for cheque issuance and reconciliation
- Prompt account reconciliation - Reconcile your statements as soon as they are received. To speed things up, many clients see a significant advantage in products such as the CIBC FirstCaribbean Online banking platform When re-ordering cheques, use a continuous set of serial numbers
- Order only one set of cheques per account
- When laser-printing cheques, issue multiple passwords to those responsible for cheque printing and use cheque paper with toner anchorage to permanently bond toner ink into the paper
- Use high quality cheques employing a reasonable mix of security features. Davis and Henderson meet all of CIBC FirstCaribbean's requirements for cheque printers
- Report any old outstanding cheques and suspected fraud on your account immediately
Criminals want you to do their banking for them. If they earn your trust, they'll use your account to cash phony cheques, collect funds from other accounts, and move stolen money offshore. They use a variety of schemes to convince you that they're legitimate. Some will even give you money to earn your trust. By accepting and re-directing electronic deposits (such as wire transfers), you could be participating in a money-laundering scheme if those deposits were proceeds of a fraud or other criminal activity. The stories vary, but the results are the same: fraud and financial loss.Examples:
|The Lottery Scam||A criminal tells you you've won a lottery. But taxes need to be paid first. If you're unable to pay the fee on your own, you may be offered financing from a third party (who is involved in the scheme). You receive a cheque to cover the taxes and then wire the money to cover the taxes. Afterward, you learn that the original cheque was fraudulent and that you're responsible for the losses.|
|The Overpayment||The criminal buys something from you and overpays for the item. After you refund the difference, you learn that the original payment was fraudulent and the charges have been reversed.|
|Earn Money From
|A job offer involves receiving funds into your bank account and then transferring a portion of the collected funds on to another account. After transferring the funds, you learn the original transaction has been reversed.|
|A criminal tells you they are a government official from another country, and that they need your help getting funds out of the country. You receive monies and then forward them. Like the above cases, the original deposit is fraudulent and you're liable for the amount forwarded.|
|The Inheritance||A relative you never met has left you money in their will. But you need to pay service fees before receiving the funds. Like the other examples above, this scam can leave you on the hook for significant financial losses.|
- Never conduct financial transactions on behalf of strangers
- Be wary of any offer that sounds too good to refuse
- Be aware that cheques and other funds deposited into your account can be reversed long after the funds have cleared
- Never wire funds until the legitimacy of the cheque or electronic deposit is confirmed
- If you suspect a cheque may be fraudulent, we recommend that you have the cheque certified at the issuing bank (the bank which appears on the cheque); you can also instruct your CIBC FirstCaribbean branch to send the cheque to the issuing bank "on collection"
- Contact your local branch, in person, via the Customer Care Centre or via email at email@example.com.
In this scam, the fraudster typically makes contact with the Accounts Payable area of a business and explains that the supplier's address and banking information have changed. The fraudster requests that all future payments for this supplier be sent to this new bank account and/or mailing address.
These fraudsters have used a variety of methods to initiate this scam:
- They send a false fax designed to look like a legitimate fax from the actual supplier, or
- They send an e-mail from a phony e-mail account, claiming to originate from the actual supplier, or
- They call an individual in the Accounts Payable area with the request, and follow up with a false fax or e-mail, as described above
Protect your business from this type of scam by advising your Accounts Payable team that whenever a supplier contacts them and requests that they update sensitive, high risk information (such as banking information, company mailing address, key contact names, or business name), they should make a return call to a trusted contact person at the supplier to validate that this request is legitimate.
- Do not advise the individual making the request that the validation call will be made
- Do not use any new telephone number(s) provided by the individual making the request
The Internet is an excellent tool for investors to easily and inexpensively conduct research on companies of interest. However, the Internet is also an efficient means of disseminating information related to fraudulent investment opportunities and artificially inflating the price of thinly traded securities.
Any investment opportunity you learn about via the Internet should be approached with extreme caution and be fully investigated before you invest. Information that appears on a computer is not necessarily true. Messages from experienced fraudsters often look very professional and may appear to be legitimate investment opportunities. You should never make an investment based solely on the content of an online newsletter, bulletin board or mass e-mail.Securities regulations DO apply on the Internet
The power of the Internet has tempted many new ventures to try to sell securities to the public illegally. In many countries, the general rule is that securities can be distributed to the public only after the regulators have vetted the company's prospectus. The failure of companies, dealers or advisors to comply with regulations should be a red flag that alerts you to a potential investment scam.
Your securities regulator can tell you whether an individual or company is registered to trade or advise in your area and whether the company selling the securities has filed a prospectus. Even then, the securities must be distributed through a registered dealer. You can check a person's registration by contacting your securities regulator.
Some simple precautions can keep you from becoming a victim of Internet investment fraud:Don't believe everything you read
- Evaluate the information you get online in the same way that you would a whispered hot tip from a stranger
- Exercise healthy skepticism, especially around investment opportunities in remote places where a full investigation is difficult, or opportunities that cannot be explained in simple business terms
- There's no such thing as inside information - if it's true, it's illegal to divulge for trading purposes; if it's false, it has no value beyond hype
- The Internet is an ideal medium for misrepresentation; disguising identities and misrepresenting qualifications online is much easier than in person.
- Your online service provider may not adequately vet - if at all - participants in investment bulletin boards.
Don't buy thinly traded, little known securities on the sole basis of online information
- Securities with limited trading are most susceptible to manipulation
- Ensure your research and investment decisions are based on reputable information
- When in doubt, get a second opinion from a qualified, independent investment professional who has no stake in the opportunity you are investigating
- There are two reasons why people are enthusiastic enough about an investment opportunity to tell you about it online. One is that that they are reputable, independent analysts. The other is that they have a vested interest in the investment. If it's not the former, then assume it's the latter, whether or not they choose to disclose any conflicts of interest
The telephone has long been used by criminals to make calls pretending to be a bank investigator, examiner or an employee of a bank or credit card company. Now, with advances in telephone technology, it is possible for these criminals to make fraudulent calls and have the call display show the legitimate bank or credit card companies name and telephone number.
If you receive an unsolicited telephone call from someone claiming to be from a bank or credit card company, here are some quick tips to help determine if the call is legitimate:
- To ensure that we are speaking with the correct person, CIBC FirstCaribbean will ask a limited number of basic questions at the start of the call to verify your identity. If you feel the questions are too personal or the call is making you uncomfortable, we recommend that you end the call and call CIBC FirstCaribbean using either the number on the back of your credit or debit card
- Only CIBC FirstCaribbean will contact you about your CIBC FirstCaribbean Credit Card account. A credit card company such as Visa will never contact you directly
- CIBC FirstCaribbean will not ask you to disclose your PIN or passwords to an agent on the telephone
- CIBC FirstCaribbean will never ask you to withdraw money or perform any financial transaction to help in a fraud or internal investigation of any kind
CIBC FirstCaribbean will call you about unusual activity on your account or in response to a request you initiated. CIBC FirstCaribbean may also call you periodically about new products and services.