Scams Hit Northwest Indiana

Scam artists and less-than-honest businesses seem to be running wild in Northwest Indiana lately. Within one week, three different articles appeared in the NWI Times:

  1. AG Zoeller files lawsuits against local businesses
  2. National rental scam reaches NWI
  3. C.P. police warn of telephone scam; two residents victims

We’ve got a full line of scams and rip-offs here: car dealerships rolling back odometers, shady mortgage schemes, the grandchild-in-trouble telephone scam and a few Craigslist rental property scams.

The articles above do a fine job of presenting the details of each situation; no need to rehash here. The real lesson is this: always be aware of potential scams, watch out for anyone promising to lower your mortgage payment, never take an online classified ad at face value, never wire money to anyone who contacted you first, and always get a Carfax report before you buy a used auto.

The bad guys are out there, and they have a variety of methods at their disposal. All the rest of us can do is be informed, ask questions and stay vigilant. But those simple tools go a long way towards keeping yourself away from scams and fraud.

Craigslist phishing

I got this lovely message just the other day:

Subject: Confirmation for Posting ID #981651681

Confirmation for Posting ID #981651681

Your ad, titled “SONY PLAYSTATION 3 METAL GEAR SOLID 4 PS3 80GB BUNDLE!”, has been posted as follows: (electronics)

Posts will appear in the list of postings and in search results in about 15 minutes. If you are trouble finding them,
please check our help page at

Please login into your account if you need to edit of delete your posting:

If you did not post this ad please change your account password asap:

For your protection please check our list of common scams: htttp://

Thanks for using craigslist!

The only problem is, all the links are disguised; they actually lead to a site hosted at I guess you’re supposed to go, “Whoa! I’m not selling a Playstation! I gotta fix this now!” and start clicking.

Here’s the thing I don’t get: why are they trying to steal Craigslist passwords? To my knowledge, Craigslist isn’t like eBay where you pay through the site itself; don’t Craigslist buyers just contact the seller and arrange for payments on their own? Is it that difficult to just create a fake Craigslist account from which to run your cashier’s check and wire transfer scams?

I just don’t get it. Somebody fill me in if I’m wrong about this; I don’t use online classifieds at all, so I don’t know firsthand how it works.

How NOT to rent a home

Let’s say you’ve just got an excess of money in your life, and you’re tired of it. To remedy the situation, you decide to lose eleven or twelve hundred dollars to a con artist.

Now, how should you go about it? Eureka! To Craigslist!

Start looking up rental properties on Craigslist and find a few you like. Start contacting property owners until one instructs you to drive by the house and check it out. The owner himself can’t be there to show you around the place because he’s on vacation overseas. However, if you like the look of the place, you can just send a check for the first month’s rent to his vacation address (or wire the money).

Follow his instructions to the letter, and hey presto! you’ve just lost several hundred bucks! The person on the phone never did own the house, and in fact has just lifted photos from a legitimate rental advertisement.

Naturally, nobody actually wants to lose money to a scam, so what I’m really saying here is don’t do any of the above.

Okay, fine, you can look for apartments or houses to rent on Craigslist. That, in and of itself, isn’t a mistake. However, if you find one you’re interested in, absolutely refuse to hand over money unless the property owner agrees to meet you there in person, has a key that opens the door, shows you the inside, and can prove that the property belongs to him or her. (You still might want to bring a friend with you, because there are other, non-financial risks associated with meeting a stranger.)

Also, never hand over money until contracts have been signed and everything is official and legal.

With the kind of scam described above, you have to consider three questions: first, why would you agree to rent a house or apartment, mostly sight-unseen (except for the outside)? What if you find out there’s no kitchen and the only toilet is right in the middle of the bedroom?

Second, why would they agree to rent a house to you, sight-unseen? There are people in the world who just wreck stuff. Any owner renting out a property is going to want to feel you out in person and make sure you at least don’t seem like the type that’s going to cut a hole in the living room wall with a chainsaw three days after you move in.

Third, if the house is locked up and the owner is supposedly on vacation overseas, how’s he s’posed to give you the key?

Fraud Prevention Templates: scams involving money wiring.

I’ve written upwards of 140 posts about scams, fraud and identity theft since last July, and it seems like there are a lot of schemes that are based on the same idea, only with different details.

For example, consider these two scenarios:

  1. Rental Scam: a landlord is sent a cashier’s check for far more than the first/last month’s rent and security deposit. The crook tells the landlord to just wire the overage back to him. Later, the check is returned as fraudulent.
  2. Mystery Shopper Scam: a job seeker is sent a cashier’s check and instructed to cash it and wire the funds back, allegedly to check out the customer service at Western Union. Later, the check is returned as fraudulent.

They’re two different scams, but they hinge on that counterfeit check, and they both involve wiring money. So let’s extract a general rule of thumb here, a Fraud Prevention Template:

Anyone who sends you a check and instructs you to cash it and wire money back to them is attempting to commit fraud.

That’s it. If you’re in a situation that involves a check and wiring money back to the maker of that check, you’re about to become a victim of fraud if you continue. The actual context doesn’t really matter.

Someone contacts you via Craigslist to purchase an item you’ve listed. They send you a check for $2,000 more than you wanted for the object. They tell you to just cash it and wire the funds back. It fits the template.

You get a letter that says you won the Canadian Lottery, but you have to pay taxes and fees first. The letter includes a check with instructions to cash it and wire the funds back to them. It fits the template.

The best part of keeping this one simple rule in mind is that you don’t even have to carry any other information around in your head. You don’t have to know that a legitimate lottery never asks winners to pay in order to claim a prize, or that you can’t win a lottery you never entered, or that it’s illegal to play foreign lotteries—you’ve got a check in your hand, and some clown is telling you to cash it and wire the money back. You know right away you’re dealing with a con artist. Fraud averted.

I’m going to come up with a few more of these templates over the next few weeks. It’s a lot easier than trying to memorize the details of every little variation.

Don’t worry, though; I’ll still be on the lookout for all those variations to write about, too.

Avoiding real estate and rental scams.

Rental and real estate scams seem to be on the increase lately. Maybe they’re just getting more attention, but if they’re anything like every other scam in the universe, they proliferate in a rough economy.

There are versions that target both owners and renters.

For example, if you’ve got a property to rent out, you might be contacted by a party who claims to be interested. They will either send you a cashier’s check (first and last month’s rent, deposit, etc.) for far over the amount you’ve asked, then ask you to wire the remaining funds back to them, or give you a check then pretend to back out of the agreement later.

In this case, remember first that anyone who gives you a check then tells you to wire some or all of it back to them is attempting to commit fraud. I have yet to come across an exception to this rule. Also, if you’re renting out a property, only deal with people you can meet in person, verify their identification, and do all the credit and other checks you’d ordinarily do.

If you’re attempting to rent a property, the scam usually involves people who claim to be landlords but aren’t. You have to verify that a property is in fact owned by the person you’re talking to. Just having the key doesn’t mean anything—sometimes this scheme is run by former tenants. Ask to see the landlord’s ID, and use local websites or other resources to verify that you’re dealing with the real owner.

As a final tip, just be beyond cautious if you’re using Craigslist for renting out a property or finding a place to rent.

The IC3 has some additional information, and this site goes into even greater detail. Whichever side of a rental situation you’re standing on, it pays to stay vigilant.

Classified Ad Scams: taking the AG’s advice to a logical extreme.

The Indiana Attorney General’s Office sent out a new message on Friday with some advice concerning criminals running scams on people who sell things in classified advertisements (I’m going to assume this happens mostly via Craigslist, although the alert didn’t mention the site specifically).

It is, as usual, fine advice, but I almost feel like their tips don’t go far enough. I’m not usually much of an extremist in most regards, but there comes a time when you need to go the extra mile to protect yourself, and selling things via online classifieds is one of those times.

So, here are the AG’s tips, along with the ways I would recommend taking them to a logical extreme:

  • When posting an ad, be leery of anyone offering to pay more for your item than the listed price. This is often the first sign of a fake check scam.

The FPU Says: Absolutely refuse to accept more than the asking price, and never under any circumstance agree to wire funds back to a buyer. On a related note, basically refuse to sell to anyone who isn’t local and willing to meet in person. Why would someone in Oregon choose to buy your cruddy old kitchen table in Indiana? Surely they could have found one closer to home.

  • Never accept or transfer money from a Cashiers Check or Money Order. Let the buyer know that you will be waiting for the bank to finalize the funds, which may take up to four weeks.

The FPU Says: Really, if you’re selling something for less than a few hundred dollars, refuse to accept any form of check. Cash only. You’re meeting the buying in person to show the item and make the sale anyway, right? In cases where the item is large enough to warrant a check, make sure to wait until your financial institution clears the check to release the merchandise. Actually, if you’re selling something that good, maybe you should consider other selling channels.

  • Investigate your buyer and talk by phone or meet in a public place to discuss important details of the transaction, such as payment and condition of the item.

The FPU Says: Yes. Local buyers only. Do your homework.

  • DO NOT ship or release interest in your merchandise until you are confident that the funds have cleared or you have the money in cash. 

The FPU Says: Just do not ship your merchandise in the first place. Shipping = trouble. Locals only!

  • Be cautious of offers to buy an item sight-unseen.

The FPU Says: Absolutely refuse to sell sight-unseen. Why would a buyer be willing to take on the risk of you running a scam? Only if they’ve got nothing to lose, I think.

The FPU Adds: Also, if you’re selling or buying an item with cash from a local person who you are going to meet in person, there is no reason to reveal any personal information to them, including your full name. Bringing a friend along is also highly recommended. You don’t want to get rolled.

Of course, you might read this and ask, “Don’t you lose the whole worldwide reach of online classifieds when you refuse to sell anywhere but locally?”

Maybe. You might as well just use the old newspaper classifieds, right?

Well, have you priced those lately? Online wins. Just be careful out there.

How to avoid Craigslist scams.

You’ve probably heard of Craigslist. Basically, it’s an online classified ad site where you can sell or buy items, find jobs, dates or local events.

It’s an interesting site, for a variety of reasons:

  1. The design of the site is super-minimalist. It’s changed very little since 1996, so it’s an example of pure function over flash (and Flash, for that matter).
  2. The company genuinely seems more interested in creating value than raking in supermassive profits, which it could do if it would just fill the site up with paid advertising and skeevy JavaScript (their profits are pretty massive anyway, though).
  3. It’s only source of revenue is paid job listings in certain cities

There are more, but “Why Craigslist Is Neat” is not the title of today’s post.

When you’re selling something on Craigslist, it’s very likely you’re going to get some messages from people attempting to scam you. So how do you avoid them?

First and foremost, deal only with local people you can meet in person, and accept only cash as payment. With this one step, you will reduce your chances of running into a scam to nearly nothing.

When you do meet your buyer in person, only do so in a public place (never at your home), make sure you tell your friends or family where you are going, bring a cell phone, consider bringing a friend, and listen to any nagging doubts you might have when you’re meeting the buyer. These tips are directly from Craigslist’s page on the topic of personal safety.

Never give any personal information to anyone during the course of a Craigslist transaction. You’re buying or selling an object with cash. Nobody needs anybody’s account numbers (or full name, in my opinion).

Generally, nobody from Craigslist is going to contact you about your listing, as the company is not involved in the transaction at all. There are no “guarantees,” and anyone who talks of these things is up to no good.

You might get people who agree to buy an item, then send you a cashier’s check for ten times the amount, with instructions to cash it and wire the excess back to them.

Sound familiar? It should—it’s a variation on the old secret shopper scam, this time in the form of an overpayment scam.

However, if you’re following the number one rule (cash only, local in-person sales only), you eliminate the possibility of this scam entirely.

Craigslist has a page dedicated to avoiding scams, which contains some examples of different scams, as well as the following:

Most scams involve one or more of the following:

  • inquiry from someone far away, often in another country
  • Western Union, Money Gram, cashier’s check, money order, shipping, escrow service, or a “guarantee”
  • inability or refusal to meet face-to-face before consummating transaction

Finally, make sure you’re actually on Craigslist. The real web address is Watch out for easy misspellings like “craiglist” or different domains (.com or .net).

It’s a great site if you use it wisely (and an interesting business model), but be aware of the dangers and stick to in-person sales using cash.