The Better Business Bureau is warning consumers about a “sweepstakes” mailing they may receive from a company called Starmark Financial Inc. dba TD Financial.
This sweepstakes scheme first came to our attention on April 21, 2008. Consumers indicate that they received a mailing claiming that they were selected among 50,000 names as a winner of $250,000. Included with the letter is a counterfeit check for $4,890 using a Meadville, PA company’s name and address. Consumers are then asked to wire $2,985 to pay taxes to receive the "winnings". The BBB has verified that the sweepstakes is bogus and the mailing comes from a company out of Ontario, Canada. They have used several different business names (Diamond Financial Inc.) as part of their sweepstakes and foreign lottery schemes. According to the BBB in Canada, the telephone numbers used by the company are cellular phones and the Morriston, Ontario address is invalid.
Counterfeit check scams are sweeping the country and the number of incidents reported has increased sharply. Unfortunately, the advent of high quality printers and scanners is making it easier for criminals to counterfeit these checks. As a result, what may appear to be an official check drawn on a legitimate financial institution or company may not be worth the paper it is printed on.
A problem can occur when a consumer deposits the counterfeit check in a bank account and, a few days later, asks the financial institution if the money is "available." A consumer should still be very careful about withdrawing money when told the funds are "available." The better course is to wait until the financial institution can confirm the funds have been "finally collected."
Many customers may not understand the definition of funds availability. When funds are available it means that the financial institution is required by law to allow its customers to withdraw the funds but the customer is still responsible should the funds not be collectible. A good check means that the bank has finally collected the money. There is no predictable amount of time, particularly with out-of-state or out-of-country checks, that this will take.
In most cases, victims report that they wired money to the check issuer only to find that the deposited check was uncollectible.
The BBB offers the following tips to those who receive checks from individuals or businesses that they do not know:
- Ask yourself if there is anything suspicious about the transaction. For example, have you been told you have won a prize and need to act quickly, or need to keep your winnings quiet while your claim is being processed?
- Independently verify that the check is drawn on a legitimate financial institution or company, and represents an actual account. Do not rely on the telephone number listed on the check. Use directory assistance to get the telephone number of the financial institution or company and call them to verify the check.
- If you have any questions about whether a transaction is legitimate, talk directly to your banker or credit union representative.
Those who have been victimized by a phony check drawn on a federally insured financial institution should phone the Federal Deposit Insurance Corporation at 877-275-3342. If the check is drawn on a foreign bank, contact the United States Secret Service at 202-406-5572 or go to www.secretservice.gov . And remember, before doing business with a company you are not familiar with check them out with the Better Business Bureau.