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Virginia fights bank scams

A new program involving state government and a group of Virginia banks and credit unions aims at protecting consumers and financial institutions from fake-check scams.

Sixty-one banks and credit unions participating in this effort will hand out a brochure created by Consumer Federation of America about fake-check scams and similar frauds to every consumer who comes in to deposit checks or money orders of $1,000 or more or to withdraw $1,000 or more.

“The key is to prevent consumers from being victimized by educating them about these scams at the very point where they may be at risk,” said Susan Grant, CFA’s director of consumer protection, who is coordinating the program.

In fake-check scams, a consumer receives a genuine-looking check or money order for something and is asked to wire money somewhere in return. For instance, the check may be described as an “advance” on millions that the consumer has won in a sweepstakes or lottery. The consumer is instructed to send money to pay the taxes and claim the rest of the prize. In another popular scenario, the consumer is recruited to work at home as a “mystery shopper” or processing payments for a company and is instructed to send money somewhere as part of the job. No matter the story, the check or money order is phony, and when it bounces, the victim owes the money back to the financial institution where it was deposited or cashed. The average loss is $3,000 to $4,000.

“Virginians need to be on guard against fake check scammers,” Virginia Attorney General Ken Cuccinelli said. “One of the best ways to avoid being victimized is to recognize the warning signs of these scams. The most glaring sign is if the person or organization sending you the check asks you to wire back part of the money. If this is the case, it is a scam.”

“In tough economic times such as these, con artists take advantage of vulnerable consumers by offering them bogus work-at-home opportunities, government grants, and other enticements designed to lure them into depositing these checks. By the time the victims learn that the checks are phony, the money is gone,” said Matt Lohr, the commissioner of the Virginia Department of Agriculture and Consumer Services.

Federal law gives consumers the right to access their funds quickly, usually within a day or two. But the consumer’s financial institution can’t tell if there is a problem with a check or money order until it goes through the system to the person or company that supposedly issued it. That can take weeks.

“These crooks take advantage of the trust that the financial system is built on,” said Bruce Whitehurst, president and CEO of the Virginia Bankers Association. “Consumers need to understand that they are responsible for the checks and money orders that they deposit or cash because they are in the best position to know if the people who gave them to them are trustworthy.”

Rick Pillow, president of the Virginia Credit Union League said, “Because of the close relationship that credit unions have with their members, they’re committed to doing whatever they can to protect them from fraud. That’s why we’re excited to be a partner in this consumer education program.”

CFA is supplying the brochure, “Don’t Become a Target,” to participating banks and credit unions at no cost (except to cover shipping expense if they are able to do so). To help the financial institutions prepare for the project, CFA provided them with training materials about fake check scams and advice about handing out the brochures. In addition to the hard-copy brochure, which is English on one half and Spanish on the other, there are two electronic versions, one in English and the other in Spanish, on CFA’s Web site at There visitors will also find a new “Don’t Become a Target” PowerPoint presentation for consumers and other educational materials about fake check scams.

The brochure will also be available to government agencies and nonprofit organizations in Virginia that conduct consumer education in the state. CFA is not offering hard-copies of the brochure directly to consumers.

Credit unions and banks in Virginia that have not yet signed up to participate are welcome to do so and should contact Susan Grant at CFA, 202.387.6121. Financial institutions that are participating thus far in Virginia are listed below.

Virginia Financial Institutions Participating in Fake Check Consumer Education Project

1st Advantage Federal Credit Union

AB&W Credit Union

Apple Federal Credit Union

Augusta Health Care Credit Union

Bank of the Commonwealth

Belvoir Federal Credit Union

Benchmark Community Bank

Bronco Federal Credit Union

Call Federal Credit Union

Celco Federal Credit Union

Central Virginia Federal Credit Union

Charlottesville Postal Federal Credit Union

Chesterfield Federal Credit Union

Citizens Bank & Trust Company

Danville City Employees Federal Credit Union

DuPont Fibers Federal Credit Union

Fairfax City Federal Credit Union

Farmers and Merchants Bank

FedStar Federal Credit Union

First and Citizens Bank

First Bank

First State Bank

Fort Lee Federal Credit Union

Halifax County Community Federal Credit Union

Hampton Roads Catholic Federal Credit Union

Hampton Roads Educators’ Credit Union

Hampton VA Federal Credit Union

High Street Baptist Church Federal Credit Union

Inland Motor Employees Federal Credit Union

ITT Roanoke Employees Federal Credit Union

KEMBA Roanoke Federal Credit Union

Kraftsman Federal Credit Union

Life Line Credit Union

Lynchburg Municipal Employees Federal Credit Union

Lynrocten Credit Union

Metropolitan Church Federal Credit Union

Norfolk Municipal Employees Federal Credit Union

Northern Piedmont Federal Credit Union

Northwest Federal Credit Union

Old Point National Bank

Partners Financial Federal Credit Union

Pendleton Community Bank

Peoples Advantage Federal Credit Union

PFD Firefighters Credit Union

Piedmont Credit Union

Queen of Peace Arlington Federal Credit Union

Radford Pipe Shop Employees Federal Credit Union

Richmond Fire Department Credit Union

Roanoke Postal Employees Federal Credit Union

Sperry Marine Federal Credit Union

St. Ann’s Arlington Federal Credit Union

St. Matthews Federal Credit Union

The Richmond Postal Credit Union

TruPoint Bank

Valley Industrial Credit Union

Virginia Credit Union

Virginia Educators Credit Union

Virginia Gas Credit Union

Virginia State University Federal Credit Union

Virginia United Methodist Credit Union

WECCU Credit Union