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Fraudulent Postal Money Orders continue to Plague Consumers
September 12, 2009
In our first newsletter this year, we identified U.S. Postal Money Orders as a primary source of counterfeit fraud losses in the financial services industry. Evidence now suggests that this type of crime has increased more than 4 times the level seen in the previous year.
Obviously, this deserves special attention by employees and managers of institutions where these items are accepted.
The typical scam has involved online purchases where the Postal Money Order is used as payment for goods bought online. IN some cases, the buyer "accidentally" sends more than the agreed purchase price so the seller not only sends the goods purchased, but also sends a "refund" of the overpayment to the criminal. Very often, the counterfeit money order is not detected until many days after it has been deposited and the transaction with the counterfeiter has been completed. In many cases, the criminal has even conducted a second or third transaction with the same victim before he or she realizes they have been scammed.
The FBI and postal inspectors say international forgers, mostly in Nigeria but also in Ghana and Eastern Europe, appear to have turned new attention to the U.S. postal money order. More than 3,700 counterfeit postal money orders were intercepted from October to December last year, exceeding the total for the previous 12 months. Although no dollar total of these losses are available, the same postal inspectors suggest that the total is "in the millions."
As with US newer currency notes, the Postal Money Orders do have significant security features in them that can be used to verify authenticity. However, again, as with the U.S. banknotes, proper identification requires a certain amount of training.
1. A genuine US Postal money order will have a watermark image of Benjamin Franklin on the left side. This is visible when the document is "backlit".
2. The Money Orders have a security thread, similar to the thread in US banknotes. The thread will have "USPS" printed on it on front and back. This thread will glow red in color when held under the correct wavelength of ultra-violet light.
3. Domestic US Postal money orders may not exceed $1,000 in value. International US Postal Money Orders have a maximum value of $700.
Verification of Postal Money Orders with ultra-violet detectors
Postal Money orders have multiple security features that can only be verified under long-wave UV light. They are simple to see and easy to verify.
1. As previously mentioned, the security thread that bi-sects the money orders will glow red and is clearly visible on both front and back sides.
2. A random pattern of blue and green UV "threads" will appear on both front and back of the money order.
3. The serial number will clearly glow in blue on the back-side of the money order. This serial number on the back is not visible under "normal" light.
