Just FYI, we had a customer this morning who was selling a car on the internet, received $2,200 extra with instructions to Western Union the extra to London, Yada, Yada, Yada. The unusual thing was that she did not have a counterfeit cashier's check like we are use to seeing - she had received counterfeit US Postal Service money orders. They were really bad counterfeits (no watermarks, no security thread, no different color inks) for someone who is used to looking at them, but I could see a newer teller or one who was not paying attention accepting them.

Just thought that I would pass this along as it seems like a new twist, or at least one I have not seen before.

Thanks for the heads up, Tom. Did the money orders conform to the USPS $1000 maximum per item?

We've seen a number of these. All have been in the $850 - $950 range. A Postal Inspector who attends our fraud group meetings told up the US Customs Service has intercepted cases of them coming in from Nigeria.

The USPS has a web page that gives a good summary of the security features. You can also call the USPS at 1-800-868-2443 to verify a PMO; however, the last time I called the anticipated wait was 7 minutes. That's not going to work if you have a customer waiting.

It's a long story so I will not go into it, but recently I discovered two postal money orders deposited to a customers account for $900 each. They were deposited on 02/07/05 but have not been returned as of today. Does any one know the time frame in which we could expect them to be returned?

We also had a Postal Inspector give us a quick class on these. The counterfeits we've seen have been rather good, except for the security thread and watermark of Ben Franklin. The security threads appear to be pencil-drawn in and the watermark is visible when the document is lying flat on a table, rather than when held up to the light. He also said that they are coming from Nigeria. Less than one week after this crash course, we caught one for $1,000 and a group of 10-$1,000 MO's were attempted locally. There have been something like 11,000 of these logged into the USPIS lab recently.

My recommendation is to get this information to your tellers and branch personnel who will be handling these items. The losses can add up pretty quickly. I also have a brochure that he handed out at the fraud meeting. If you PM or email me, I can get you a copy of it.

We got one back on 2/18 that was deposited on 1/10. There were three total - I'm positive the other two were also bogus but we have yet to receive them back.

It just so happened that we received the items back today after my post. To my surprise we received 4 couterfeit postal money orders. I now know that two of the items were cashed and two were deposited.

Part of my frustration now is my understanding of Reg CC holds. If I am correct Postal Money orders deposited require next day availability. The account involved here was a new account and a new account hold could have been placed however it would be subject to the $5000 rule which means that the first $5000 of any such deposit of money orders would have to be available to the new depositor the next business day (deposit was made in person on teller line). Right?

Therefore, with practically no way to put a reasonable hold on the account, our only defense is to identify them as counterfeit at time of deposit. Last week I distributed information on security features. So I can't fault the teller for not putting on a hold. Also given that these may have been good counterfeits (all I have now are copies so it is hard to tell) can I foult her for not catching the counterfiet? THIS IS VERY FRUSTRATING.

I understand the frustration with Reg CC. The ones we got stuck with were over a month getting back to us.

I'm wondering here (because I don't know) if we could refuse these as late returns under the UCC? If they had been checks we would have refused them, but I don't know about PMO's.

There is no midnight deadline on Postal Money Orders. Here are the rules for reclamation:

"The postmaster general has the right to demand refund from the presenting bank of the amount of a paid money order if, after payment, the money order is found to be stolen, or to have a forged or unauthorized endorsement, or to contain any material defect or alteration not discovered on examination. Such right includes, but is not limited to, the right to make reclamation of the amount by which a genuine money order with a proper and authorized endorsement has been raised. Such right must be exercised within a reasonable time after the postmaster general discovers that the money order is stolen, bears a forged or unauthorized endorsement, or is otherwise defective."

One of customers deposited 4 of these puppies with us as part of a Nigerian scam. The teller didn't catch them. (They do look fine to someone who isn't familiar with the USPS MOs.) We lucked out, though. The customer's computer crashed before he got the email telling him where to wire the money, and consequently was still in possession of the cash. When informed of the situation, he voluntarily brought the cash back in to cover the counterfeits. Since the bank incurred no loss, and the dollar amount in question was only $3,600, nothing more was done. I gave the customer a stern lecture on scams and the evilness of greed and sent him on his way.

As far as the comment about having to provide next day availability, USPS money orders are really in the same pot as Treasury checks. They are both exempt from the midnight deadline rule, yet Congress saw fit to make banks treat them as near cash. I suspect that the reason that scam artists are starting to use them in their counterfeit scams is a combination of the prolonged return time and people's general lack of familiarity with the security features of the "genuine article."

Thanks, Randy and John. I was prety sure that was going to be the answer but it never hurts to ask. I would appreciate the reference for the cite - I know someone's going to ask me to "prove it" when I tell them they can't send these items back as a late return!

Here you go: S020 Money Orders and Other Services

P.S. It's Randy

Quote:

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P.S. It's Randy

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Sorry about that - I know a Rich Carey and got confused (nothing new for me). As soon as I did it I realized and went back to edit but you were already there.

Thanks for the cite.

If a customer presents a USPS money order for cash/deposit, can't you send the item in for direct collection? That would get around the Reg CC next day availability but may not make your customer very happy!

Yes, you can send the item for direct collection. And yes, it's likely to displease your customer. But the customer will be a lot more displeased if after a couple months the PMO comes back to bite him in the assets!

We had a customer deposit four back in October of last year. We just got them back last week. Where is the above quote or "law or regualation" actually written? So far I have been unable to find it and would like to look at contesting their returns. Who has the responsibility of determining if there is a "material defect or alteration not discovered on examination"? Seems to me it would be the paying bank or the PO. It just seems very unfair that we are stuck with an ultra late return.

Additionally, my reading of the above would not apply to counterfeits. The endorsements are proper in that they are payable to our customer. The customer is the payee and the payee signed them. The MO's are not "stolen". No doubt they are counterfeit but they are not stolen.

We had a customer bring in 4 of those puppies for $950 each, was going to open a new account. Kudos to our CSR who asked questions and found out the customer received them through the internet. I hand carried the MO's to the USPO and they confirmed they were counterfeit. Our customer was greatly appreciative we had saved his asset!!

PS - I was told the only way the USPS will verify the authenticity is for them to physically see the item.

How do you send for collection? We were told that you could not send them for collection.

I had not read the second page on Threads when I posted the previous comment. Thanks for the link.

After reading S020 it appears the postmaster must make Reclamation rather than run the checks back thru the fed which is the way they were returned to us. Would it not be similar to other paper Treasury items?

Is there a definition for "reasonable time after resentation"?

Since the postmaster general has the "usual right to examine..." I would think that paragraph "e. Examination.." applies to the postmaster general. I would not argue that if the POMO presented to us is so bad that anyone would recoginize it as counterfeit that the bank of first deposit could avoid liability. However, some of the ones we have seen are excellent counterfeits.

As we continue to work with our customer to recoup our losses, I am getting more frustrated with these things. How can they require banks to give next day availability to these items but yet reserve the right to return 4 months later as in one post noted above?

Is there not some defense banks can assert in cases of quality counterfeits? If there is I haven't seen it posted yet. Banks aren't making the money on these things but we are saddle with nearly all of the risk. It's insane.

I too was scammed in this counterfeit money order scheme. I deposited the money orders to my bank and they deposited it and then after a month, I finally was told that they were counterfeits. Please tell me if the CSR is held responsible for his negligence of not looking at the money orders clearly . I am so upset about this. They deducted the amount from my account without even contacting me of this fraud!!! Please advice!!!

Sorry, but you are responsible for the counterfeit money orders, not the employee at the bank, nor the bank. Make sure that you file a police report or contact your local USPIS.

i got ripped off 4000 in fake money orders, stupidly i thought once they cleared they were legit.. the bank took a month to let me know. i came a hair from losing a additional 6000. every teller in this country should be required to take a lesson on identifing bogus notes....these nigerians are robbing us blind