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A woman on Facebook recently contacted my dad.

She asked him to get a bank account so she could send him money, and he would send money to her employees (about 12 people), and she would pay him for doing so each time. She said the last person who she had do this for her ran away with all her money. But he would have made more money continuing to do this money transfer thing for her. I am not sure if this is a scam or not. Sounds weird to me, but my dad said it’s worth the try.

I had to get the bank account in my name because my dad has bad notices on his records for falling for fraud traps and asking for refunds too many times. She stressed to him that it had to be the bank “American Christian Credit Union;” for what reason, I’m not sure. There is no large amount of personal money in this bank account, just the minimum amount to open the account: $25.

I’m skeptical about this and confused as to why this person would send a large amount of money to a random person on the Internet?

Has anyone heard of any scams like this?

What should I look out for?

  • 231
    So your dad already has bad notices on his records for falling for fraud traps and asking for refund too many times...and you had to open up a new account in your name for this, and you are asking whether this scheme, which is dubious to you, is setting off all kinds of alarms in your head, is maybe a fraud? If my dad had done this so many times to have notices put on his records, I wouldn't trust any new schemes he tells me about. – Fixed Point Jul 30 '16 at 7:48
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    "I had to get the bank account in my name because my dad has bad notices on his records for falling for fraud traps ..." - And now you're following in his footsteps :) – marcelm Jul 30 '16 at 7:56
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    "A woman on Facebook recently contacted my dad." I knew a scam was coming up right there, and my instinct turned out right. – Masked Man Jul 30 '16 at 12:14
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    Odds are fairly high it isn't even a woman. – keshlam Jul 30 '16 at 15:41
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    This fairly SCREAMS "SCAM!". ANY TIME someone says, "Hey! Open a bank account, I'll send you money, you send it back, and keep some for yourself", IT'S A SCAM! Any time the widow of an African dictator asks you to send her $10K "to show good faith" and then she'll send you a million - IT'S A SCAM! ANY TIME some former minister of finance for some country you've hardly even heard of offers to send you some money, IT'S A SCAM! Let's establish a general principle here - ANY TIME SOMEONE OFFERS TO SEND YOU MONEY FOR NOTHING, IT'S. A. SCAM!!! – Bob Jarvis Aug 1 '16 at 2:42

10 Answers 10

100

The other answers describe why this is highly likely to be a scam.

This answer describes why you don't want to get involved, even in the unlikely case that it isn't a scam. I'm describing this using US law (which I'm not particularly familiar with, so if I go astray I'd suggest others fix any flaws in this answer), but most other countries have similar laws as these laws are all implementations of a small number of international treaties have very large memberships.

The service you describe (accepting money transfers from one party and transferring them to another) is one which, if you engage in it for profit, would classify you as a "financial institution" under 31 USC 5312, specifically paragraph (a)(2)(R):

any other person who engages as a business in the transmission of funds, including any person who engages as a business in an informal money transfer system

Because you would be acting as a financial institution:

  • You would be required to track amounts of money paid to or from individual clients or groups of clients and notify the treasury if they exceeded a certain threshold
  • You would be required to gather documentary evidence of the identities of your clients
  • You would require a member of your staff (i.e. yourself) to have special training to identify possible instances of money laundering
  • You would be required to notify the authorities in the case of suspected money laundering

Failure to follow such requirements can lead to a fine of up to $250,000 or a 5 year prison sentence (31 USC 5322).

See also: Customer Identification Program and Know Your Customer.

  • 2
    Perhaps that's why the last person absconded with their money. Doing so is less illegal than doing as they requested. Of course, since the money isn't real, absconding with it is not illegal at all... Whereas, funding terrorism is a serious crime. Thank you OP for sticking this one to the top! – Harper Dec 15 '18 at 1:22
240

Absolute scam. Any time anyone asks you to open a bank account so they can send you money and then you have to send some portion of it back to them, it's a guarantee that it's a scam.

What happens is that your dad will deposit the check and transfer it to this woman, then the check will bounce (or turn out to be fake altogether) and your dad will be on the hook for the money to the bank.

These schemes are dependent on the fact that people want hope and believe in quick, easy money, and it works as long as the con artists are able to get the 'mark' (the person who deposits the check and sends them the money) to send the money before the check (always drawn on some obscure foreign bank) has a chance to clear.

This is another variation of a long-running type of bank scam, and if you get involved, you'll regret it. I hope you can keep your dad from getting involved, because it will create a financial mess and affect his credit as well.

The basic premise of this scam is this: In the interests of providing good customer service, most banks will make some or all of a deposit available right away, even though the check hasn't cleared. The scammer has you withdraw the money (either a cashier's check, have you send a wire transfer, etc) immediately and send it to them.

Eventually the check is returned because it is

  • bogus (not real)
  • not a real bank
  • not a valid account or
  • an account with no money in it.

The bank charges the check back against your account, often imposing pretty substantial penalties and fees, so you as the account holder are left without the money you sent the scammer and all of the fees.

This is the easy version of events. You could end up in legal trouble, depending on the nature of the scam and what they determine your involvement to be. It will certainly badly affect your banking history (ChexSystems tracks how we all treat bank accounts, much like the credit agencies do with our credit), so you may have trouble opening bank accounts. So there are many consequences to this to think about, and it's why you JUST SAY NO!!

Don't walk away from this -- RUN!!!

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    I just wasn’t sure on the process of this type of scam but i figured it would happen this way, Thank you for commenting back to me! – Ivana Jul 30 '16 at 5:02
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    Sure thing. It's a shame your dad is so easily victimized. People are too quick to believe in easy money. There's no such thing, and it could create some real financial AND possibly legal problems for him if he gets involved. You need to get him to understand this before he does something he really regrets. – Daniel Anderson Jul 30 '16 at 6:08
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    There is also the potential to be set up as the fall-guy in some criminal money laundering operation and being prosecuted. Or the payments to the account might be from other innocent people who are told they are paying for goods that never turn up, then the OPs dad is open to accusation of fraud. – RedGrittyBrick Jul 30 '16 at 16:34
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    @BЈовић It takes time for a check to clear. During that time, the check is already deposited (and your account balance is increased accordingly), so you send the money by wire. Then, the check fails to clear, and you're left with a negative amount in your account. Seriously, how come the US still uses checks, for crying out loud? :D – Luaan Aug 1 '16 at 15:31
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    @DanielAnderson : Even if the checks are cleared very fast, or even if the money comes in by a regular transfer instead of a check, even if the money which comes in is real, there is still the danger that the money is transferred from stolen credit cards or hacked online accounts, for example. Which could mean the victim not only loses money to the scammers but might even end up in jail. – vsz Aug 2 '16 at 4:09
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Yes, it is a scam.

Think about it: Why would a stranger offer to give you money? Why would she need you to pay her own employees? She wouldn't. It is a scam.

You have more to lose than just the $25 that is in the account. Just as has happened to your dad before, you will be receiving money that is not real, but paying real money out somewhere else.

One more thing: If your dad has fallen for these scams so many times that he can't get a bank account anymore, why are you still taking financial advice from him?

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    i appreciate your words.It sounded iffy to begin with I just needed to hear it for others to know for sure. Its a hard situation when all he things about is making money/ easy money. Anything that sounds good he’s sold. Me and my sisters tell him time after time they never work and he continues to try. To people contacting him on Facebook or the business money making programs he wants to try them all. Thank you for commenting back to me! – Ivana Jul 30 '16 at 5:01
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    There are no programs where random strangers contacting you on the internet will lead to quick easy money. If there was such a path to riches, why would the people involved have to look for strangers to share the money with instead of keeping it all for themselves? The only people making money off these things are the scammers. – Zach Lipton Jul 30 '16 at 20:34
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    @Ivana sorry to be blunt, so please don't be offended, but if your dad is so an easy prey of such schemes he may have some problems that may need psychological counseling. I'm not a doctor, but there are things like compulsive shopping behavior that are well known in the medical literature, and the abnormal level of trust your dad put in complete strangers resembles such behaviors. At least you or your sister could seek professional counseling about the subject and let an expert judge whether there are symptoms of pathological behavior. – Lorenzo Donati Aug 2 '16 at 11:59
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Don't do it.

If it's not the classic scam described in Daniel Anderson's answer, then it's probably money laundering. In that case, the woman would actually wire you money, which you have to wire to someone else she names. This is done to enter illegally gained money into the regular money circulation, hiding the trail.

If this is the case, you would have to do many transfers, and the woman might actually pay you for performing this service. And then, one day, when the FBI/police busts some people and follows the illegal money trail they'll end up at your dad. Or rather, at you, because the account is in your name. And then you'll have a lot of explaining to do and a lot of time in jail to think about what a bad idea this was. See this question for an example of this. This answer also touches on the subject.

Close the account, and run away from this. No good will come of it.

It's very simple: if someone you don't know (or sometimes, you do know) contacts you and offers you easy money, they are getting something out of it at your expense. Period. It might be a scam where they somehow end up with the money, or you might be doing something illegal for them, but it always benefits them, not you.

As a final thought, you also write:

I had to get the bank account in my name because my dad has bad notices on his records for falling for fraud traps ...

What makes you think this time it will be different?

Think carefully, because the bank account is in your name! So when the shit hits the fan, it's you who's in trouble.

  • It's worse than money laundering – user4951 Aug 2 '16 at 18:38
  • @JimThio Care to explain? – marcelm Aug 2 '16 at 19:55
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    @marcelm I'm not Jim, so I can't explain what he meant, but being duped into being a money mule is worse than money laundering because you're being made a money-laundering patsy who ends up going to jail, rather than being a traditional money launderer who ends up retiring to a Caribbean tax haven. – HopelessN00b Aug 3 '16 at 2:22
  • So, the situation is still money laundering, and the end result is still what I described :P – marcelm Aug 4 '16 at 21:40
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This is a scam, I'm adding this answer because I was scammed in this fashion.

The scammer sent me a check with which I was to deposit. When the money showed up in my account, I would withdraw the scammer's share, and wire the cash to its destination.

However, it takes a couple days for a check to clear. Banks, however, want you to see that money, so they might give it to you on good faith before the check actually clears.

That's how the scam works, you withdraw the fake money the bank has fronted before the check clears. A couple days later, the check doesn't clear, and you wake up with an account far into the negatives, the scammer long gone.

  • 1
    Here's a link with more info: banking.about.com/od/checkingaccounts/a/clearingchecks.htm – JimmyJames Aug 1 '16 at 14:21
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    As mentioned in the link, if the deposit was from a fraudulent source such as a forged check, the check can actually fully clear. Later when the crime is discovered, the deposit it revoked and you are left holding the bag. Anytime someone wants cash back from a check they gave you, assume it's a scam. – JimmyJames Aug 1 '16 at 14:26
  • @Carl Its real sad how these people find way to con others. How much did you lose, few hundred dollars or thousands? – aaa Aug 2 '16 at 13:26
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The answers here are all correct. This is 100% scam, beyond any reasonable doubt. Don't fall for it. However, I felt it valuable to explain what would happen were you to fall for this. It's not all that hard to understand, but it involves understanding some of the time delays that exist in modern banking today.

The most important thing to understand is that depositing a check does not actually put dollars in your account, even though it appears to. A check is not legal tender for debts public and private. It's a piece of paper known as a "bill of exchange." It's an authorization for a payee (you), to request that their bank pay you the amount on the check. A transaction made with a check does not actually draw to a close until your bank and their bank communicate and cause the actual transfer of funds to take place. This process is called "clearing" the check.

Despite living in the modern times, this process is slow. It can take 7-10 days to clear a check (especially if it is an international bank). This is not good for the banking business. You can imagine how difficult it would be to tell a poor client, who is living paycheck to paycheck, that he can't have his pay until the check clears a week later. Banks have an interest in hiding this annoying feature of the modern banking system, so they do. When you deposit a check, the bank will typically advance you the money (an interest free loan, in effect) while the check "floats" (i.e. until it clears). This creates the illusion that the money is actually in your account for most intents and purposes. (presumably a bank would distinguish between the floating check and a cleared check if you tried to close out your account, but otherwise it looks and feels like the money is in your hands).

Of course, if the check is dishonored (because the payer had insufficient funds, or the account simply did not exist), your bank will not get the money. At this moment, they will cancel any advances you received and notify you that the check bounced. Again, this happens 7-10 days later.

The general pattern of this scam is that they will pay you by a method which clears slowly, like a check. They will then ask you to withdraw the money using a faster clearing method (like a wire transfer or withdrawing the cash). Typically they will be encouraging you to move quickly (they are on a timetable... when their check bounces, the game is up!) At this time, it will appear as though the account has a positive balance, but in fact it has a negative balance plus an advance on the check. This looks great until 7-10 days later, when the check bounces. At that time, the bank will cancel the advance, and reality will set in. You will now have an open bank account, legally opened by you in your own name, which is deeply in debt. Meanwhile, the scammer walks away with all the money that you sent them (which cleared quickly).

There are many variants which can hide the details. Some can play games with check kiting to try to make your first check clear (then try to rope you in for a more painful hit). Some will change the instruments they use (checks are the easy ones, so they're simply most common). Don't try to think "maybe this one is legit." These scammers literally make a living off of making shady transactions look legit.

Things I would recommend looking out for:

  • The scammers will ask for a bank account in your name. It might be your existing bank account (Danger! Danger!), in which case they can wipe out your entire life savings, or it may be a new account they recommend you create (they may pick a bank that they know isn't very good at watching out for these scams). However, the end results is always the same. You end up with a bank account which you opened up in your name, bled deeply into the red by the scammers. You now own whatever debts they racked up (and they're really creative in ways to do this). Because it's in your name and you actively caused every transaction to occur, not only do you have few resources to get your money back, but you are, in fact, committing fraud and you can get in trouble for it!
  • The scammer will try to manipulate your sense of urgency. In general, they will try to make you act very quickly, while they themselves may act quickly or slowly depending on what story they're trying to sell. Nigerian 419 scams (a common variant of this) are known for trying to create the illusion of a payday transfer that's in limbo, and just needs a few more dollars to make it happen. Don't believe them, the payday doesn't exist.
  • The scammer's story sounds obtuse. One common trend with them is a story where for some really odd reason, they have a transaction they need to make, but cannot make it themselves. For some reason, it needs to go through a third party. There are very few cases where this is legal, and I can't think of any cases where they're reasonable. If, for some reason, they need some third party they've never met to make the transaction for you, this should be flagged as suspicious always!
  • Scammers make a living off of this. They are creative, and they are persistent. I've listed a lot of common traits of their scams here. Do not assume that they will abide by these as rules. Right now, most of the scams show these traits because that's where the money is. If people get better at spotting their scams, they will move to scams that you didn't expect. Don't assume that, just because a particular individual isn't doing anything on my little bulleted list here, that they aren't a scammer. These are good things to look out for, but use common sense. If it smells funny, get out!
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    Even it isn't done by check but by real transfer, the danger still persists that the transfers are coming from stolen cards or from the profits of illegal activities. – vsz Aug 1 '16 at 4:33
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    There really are transactions that need to go through a third party. For example, a couple of years ago I bought one house in the US and sold another. Each time, we used a third party to collect up and distribute the money and documents. The difference is that each transaction used a licensed and insured escrow agent, not some random individual. Where there is a legitimate need for third parties, there will be well established businesses serving that need. – Patricia Shanahan Aug 1 '16 at 17:31
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    @PatriciaShanahan Thank you for the counterexample, and the good rule of thumb for how to distinguish between the scammer and the legitimate business in such cases. In hindsight, you're right: I was aware of escrow cases like that, I simply forgot about them while writing the bulleted list. I also remember the gobs of paperwork that came with making it legit. – Cort Ammon Aug 1 '16 at 17:38
  • As pointed out in other examples, it really doesn't even matter if the check clears or not. It could be fraudulent and be reversed months or years down the line, it could be funds from a criminal enterprise that will be seized under civil asset forfeiture later, etc. Regardless, someone will come take that money back at some point, and the account holder will be on the hook to repay the money they transferred away. – HopelessN00b Aug 3 '16 at 2:26
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100% scam. Run away. If you have already given the bank account, inform the bank and close the account. Else just close the new account opened.

Do not contact the scammer or reply back.... Just ignore ... Don't read any of scammer email, they are very convincing in why it's right and why it's not a scam.

  • 2
    Just wondering – why do you advise to "just ignore" the scammer? Why not report the scammer to the police? – Schmuddi Jul 30 '16 at 8:23
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    @Schmuddi You can report to police about potential crime. The ignore is more from closing the communication lines. – Dheer Jul 30 '16 at 8:26
  • This reminds me of James Veitch: "Instead of deleting them, I decided to hit 'reply'," with hilarious results. :) – Wildcard Aug 4 '16 at 23:20
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This is either laundering money or laundering non-money. All the other answers point out how a cheque or bank transfer will take days to actually clear. That is a red herring!

There are lots of ways to illegally transfer real money out of existing accounts. Stolen cheque books, stolen banking details (partly in connection with stolen smartphones and credit cards) and cards, money transfers from other people duped in a similar manner as you are: it is much easier to steal money than invent it, and it takes quite longer until stolen rather than invented money will blow up at the banks.

All of those payments will likely properly clear but not leave you in actual legal possession of money. People will notice the missing money and notify police and banks and you will be on the hook for paying back all of it.

Cheques and transfers from non-existing accounts, in contrast, tend to blow up very fast and thus are less viable for this kind of scam as the time window for operating the scam is rather small.

Whether or not the cheque actually clears is about as relevant of whether or not the Rolls Royce you are buying for $500 because the owner has an ingrown toe nail and cannot press down the accelerator any more has four wheels.

Better hope for the Rolls to be imaginary because then you'll only be out of $500 and that's the end of it. If it is real, your trouble is only starting.

  • 1
    A very salient point. The only thing worse than being scammed out of a large sum of money that you owe a bank eager to collect it is to get a knock on your door one morning and find a number of serious-faced federal agents there to inform you that you'll need to come with them because they think you're guilty of wire fraud, conspiracy to commit money laundering, and god knows what else. – mostlyinformed Aug 4 '16 at 4:11
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  1. If it's real, it's illegal. She needs someone to be a middle man who transfers money and doesn't ask questions. The list of possible reasons should be plenty obvious and range anywhere from fraud to terrorism.

  2. There are thousands of ways to get already transferred money back from your account. If the source of the money is some kind of fraud that's only detected 2 years later, someone will ask you for the money back in 2 years.

  3. If real people who operate within legal and moral boundaries want to pay someone, they do not ask someone on Facebook to do it for them.

5

Well, all of the previous answers already mentioned the upcoming scam and danger situation for your financial position. I thoroughly read all answers and wanted to add a few more lines on it. Cort Ammon) already shows details of it.

Any kind of financial transaction involving a complete stranger is the first big scam tag that shows up and this should always 'Never Fall In' type situation.

If you open a new bank account or give away any existing bank account to this lady, other than just losing some amount, you might pay earlier than clearing checks you deposited on behalf of your 'stranger' partner.

Depending on their target/plan/experience with your bank account they can make you a victim of a bigger crime. There is a full length of scam plans, like sending you false checks to deposit and ask you withdrew money to send them back to even having very big incoming transaction to your account sitting idle on your account which might originate from a crime beyond the financial domain.

You can try to be smart, thinking in mind, well, let them send some, I will never send them back before bank declare the deposited checks got horned and clear (and send back the amount after keeping your share). But, still you will face problems later. Even if your account fills up with real money and after confirming with bank you find it OK and never return them (scam a scammer). Still you will not have any valid authority or answer describing how/why you got this money if someone ask you later.

Depending on scammer's ability, they might even give you control over fund to spend for your own (to gain some trust from your part). On this type of scam it is a sign of an even bigger danger. I live such a country, Bangladesh, from where recently they successfully transferred out around US$10 millions using a bank account of an outsider like you keeping in between source of money and final unknown destination. The result is the owner / operator of those accounts used for these transfers are now under law enforcement pressure, not only just to find out where ultimately money has gone, but for sure they will face some degree of charge for helping transfer of illegal money overseas". For someone who is not part of a full scam chain it is a big deal. It might ruin their life forever.

To be on the safe side, and help protect others from falling on the same type of problem you may contact your local law enforcement agency. Depending on the situation, they might be interested to run a sting operation using your information and support to catch and stop the crime going to happen soon or later.

I would give a rare chance of 2% legitimate reason for anyone to use a third-party bank account to pay some other living either different country (still it is not legal, but a lower-type crime). But obviously they will not ask randomly over the Internet/social network sites. In your case this is a real scam.

Be careful and stay safe; Good Luck.

protected by Chris W. Rea Aug 1 '16 at 15:30

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