Accepting a money order as payment for used clothes

Protect Yourself from Money Order Scams

Money order scams are on the rise and fraudsters are getting creative in how they target unsuspecting consumers. With the multitude of ways available to pay someone electronically, money orders might seem obsolete. But there are plenty of people who use them. And criminals are trying to take advantage of this. To help protect your accounts and your money, here’s more about money order scams.

What is a Money Order?

A money order is a certified form of payment that is pre-paid so they are readily accepted and converted to cash. Consumers who don’t have checking accounts tend to use money orders to pay for rent, utilities, and other small debts.
Money orders are typically issued by a government or banking institution. You can also purchase money orders from Western Union, MoneyGram, Walmart, and some check cashing stores. There is often a fee to purchase a money order.

How Money Order Scams Work

There are countless scenarios in which money orders are being used for fraud. In many cases, a legitimate money order is purchased for a small amount but then altered to show a different amount. Here are some of the ways these bogus money orders are being used:

  • Sold Online: We are seeing altered Western Union money orders being sold through social media at a discount. The scammer will sell a $1,000 money order to an unsuspecting consumer (often a young person) for $300. The buyer then deposits the money order thinking it’s as good as cash and spends the money. When the money order comes back as fraud, the buyer not only loses their $300, they lose the $1,000, if they already spent it.
  • To Buy Goods: The scammer will use the altered money order to buy something from you via Craigslist, Let It Go, or another online shopping resource. You send the item to the buyer and deposit the money order. When it comes back as fraudulent, you are left without the item or the money.
  • Secret Shopper Scam: In this case, you are hired to be a secret shopper and the scammer provides a money order for you to deposit into your account. The money is to be used as payment for your time plus additional to purchase gift cards at designated stores. After you shop, you fill out a survey about your experience and provide the gift card codes to the company. When the money order bounces, you are left owing the money back to your bank.

How to Protect Yourself from Money Order Scams

The best advice we can give is if it’s too good to be true, it probably is. Trust your instincts and use these guidelines when accepting money orders:

  • Before depositing a money order, always verify the funds. Call the phone number or website listed on the document. For Western Union money orders, you can call (800) 999-9660.
  • You should also look for signs of forgery. With the recent Western Union money order scams we’ve seen, the alteration to the document is fairly obvious and the dollar amount has a raised feeling to it when you touch it.
  • The best form of protection against money order scams (and check scams too) is to never deposit a money order from someone you don’t know. If you must accept a money order or check, never accept one for more than your selling price. And if you are unsure if the money order or check is real, stop by your local branch so we can help verify it for you.

Alternative Forms of Payment

There are other ways to accept payment from someone if you want to avoid money orders. They include:

  • Cash – Whenever you can, accept cash rather than a check or money order from someone you don’t know.
  • Electronic Transfer – Have the money sent to you via a money transfer system, such as Paypal or Venmo, where you only have to provide your email or cell phone number to the sender (never provide your bank account information).
  • Prepaid Debit CardPrepaid debit cards can be purchased at many retailers. Once you receive it, you can use it to buy goods at stores or to shop online. You can also add funds to it later on. Be sure to verify funds on the prepaid debit card before accepting it by calling the number or visiting the website listed on the back of it.

If You Suspect Fraud

If you suspect you’ve been a victim of fraud, please take time to report it to your local law enforcement agency. If the money order was mailed to you, you can also contact U.S. Postal Inspectors to let them know. In addition, if you feel your 1st United account information has been compromised, please contact us immediately at (800) 649-0193 so that we can assist you.

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