If You Fall for Scam # 1, Watch Out. Scam # 2 May Be Lurking.
July 17, 2008

Scammers often say, “Sorry. There was a mistake.  But don't worry, I will make it right.” That promise is usually the start of another scam attempt.

The Better Business Bureau saw such a scam yesterday, involving a citizen from the Elizabethtown, KY area who became involved in online conversations with a woman claiming to be a model. The “model” was supposedly a young woman in Nigeria, living on funds left by a recently-deceased father but hoping to pursue her modeling career in the United States.

In e-mail and instant message conversations, this “model,” learned that the Elizabethtown-area man could use some help to stay current with monthly mortgage and home equity loan payments. After exchanging a few messages filled with words of kindness, gratitude and desire to help each other, the “model” arranged to send the Elizabethtown-area man a $4,500 Cashier’s Check drawn on a bank in Buffalo, NY. The Kentucky man was told to use $1,900 toward his mortgage and home equity payments. He agreed to wire the remaining $3,600 to a man in Nigeria who was supposedly the “model’s” travel agent, handling arrangements for her trip to the United States.

But several days after the money had been wired to Nigeria, the Kentucky man’s bank advised him that the Cashier’s Check had bounced, that the account had apparently been closed. The man contacted his new friend, the “model,” who said that she was so sorry, that a mistake had occurred. But she told the man not to worry, she would make everything right.

Realizing that the man would be behind on his mortgage and home equity loan payments because of the previous bad check, the “model” said that she could “make things right” by sending a payment directly to the man’s bank as a “principal paydown” on his home equity loan. The man understood that the money would be credited to his home equity line of credit through an electronic funds transfer. With the help of his bank, he provided information needed for the electronic funds transfer.

But instead of an electronic funds transfer, the scammers sent another check directly to the man’s bank. This time, the “model” said that the check for $16,800 was drawn from “a trust account” left by her deceased father. Because the “model” needed additional money for her trip to the United States, she had transferred a larger amount of money than needed to correct the previous $4,500 “error.” The “model” told the man that she was so sorry about the previous mix-up that she wanted him to keep part of the extra money to help with his mortgage and home equity loan payments. But she also needed for the man to pull some funds from his home equity line of credit and wire the money to a bank in Taiwan.

At the recommendation of his bank, the man contacted the Better Business Bureau before wiring money to the Taiwanese bank. The BBB was able to tell the man that, without a doubt, the second check was just as bogus, just as “not worth the paper it was printed on,” as the first check. The local man who fell victim to one scam was saved from falling victim to a second scam.

The “new wrinkle” in this scam was the tactic of sending a check directly to the intended victim’s bank to be credited as a principal payment on his home equity line of credit, then asking the man to withdraw money from that home equity account and wire the money to the scammers.

An “old scam wrinkle,” but one to remember, is that the victim of one scam will often be the target of a second scam. The second scam is based on a false claim the first scam was an “honest mistake” and that the scammers will “give your money back, and more” to make things right. Not so. The scammers are only trying to steal again.

Scammers often use “online relationships” to get information vital to their scam. In this case, once the scammer learned that the Elizabethtown-area man had a mortgage and home equity line of credit, this information became key to their scam attempts.

The BBB recommends that no one wire money to someone you don’t know and trust completely. If anyone sends you a check and wants part of that money wired to someone, don’t do it. Be especially cautious about sending money to someone you meet through e-mail and instant messaging.