Beware the Cashier's Check

The African overpayment scam that has been tormenting Internet merchants over the last few months has hit the event industry! They are going for the jugular by hitting those who need the gigs most — planners in New Orleans.

My company was recently approached via e-mail to plan a destination wedding to New Orleans. The client claimed that her fiance was relocating there from Germany to work for Coca-Cola in the marketing department. They would be arriving in New Orleans on Aug. 24 and the wedding would take place Sept. 8 — a quick turnaround but doable. I sent my proposal, my quotes and my references and was delighted to find out that I was chosen as their wedding planner. They returned the contract and sent a tracking number for the 50 percent deposit, which she was sending via FedEx. All seemed well …

But alas, here comes the proverbial wolf in sheep's clothing, the Trojan horse — the cashier's check. While I considered myself a business-savvy woman, I admit I do not know all of the rules of banking and world economics. I thought that the cashier's check, once approved by the bank, was considered as good as cash. I thought the same of money orders and traveler's checks. Even a personal check, once given the right amount of clearance time, should be an acceptable form of payment.

Not true. Counterfeit forms even of international payment take only a couple of days to be cleared by the bank in the U.S., and the funds are then released to your account. What not everyone realizes is that the check then goes to the U.S. Federal Reserve Bank, which will discover the fraud and alert the bank that the funds must be returned by the bank account holder. This process can take up to 90 days.

OLD NEWS, BAD NEWS

This scam has been going on for awhile. The client sends the cashier's check and for some reason overpays the vendor, asking that the overage of money be wired to a third party in Africa. They ask for it to be sent via Western Union, so there is no way to trace the transaction.

This particular client used the wedding music for the African connection, claiming that she had a deadline for payment that was within days of the receipt of my cashier's check, and the band wanted U.S. funds. Luckily, I was made aware of the scam by my top business advisor — my dad.

Within 24 hours I had spoken to everyone from Coca-Cola to banks to the FBI. I was confident that I needed to send an e-mail to the client making her aware of the situation, just in case this was an exception and she was legit, and asking her to understand why I was unable to transfer any money to anyone. She argued, pulled at my heartstrings and laid on a guilt trip long enough to requiring packing a lunch.

I made one final go with my newfound Nancy Drew skills and did a reverse lookup on the country codes of the phone numbers from which she'd called me. I found that the first was 33 — the country code for France. The second was 229 — the country code for the Benin Republic in Africa, which is the exact republic to which I had been asked to wire the money. When the FedEx arrived with the contract and the cashier's check, the name on the contract was typed rather than signed and the issuing bank was Bank of America — a bank that does not have branches in Louisiana. Need I say more?

LET ME COUNT THE WAYS

My reply to the client was short and to the point and included the reasons why I was suspicious:

1. You have not sent me a signed contract.

2. You have not sent me a deposit that will clear before this transfer would have to be made.

3. The “very popular” band you mentioned cannot be found anywhere on the Internet and is not known by any of my African music industry connections.

4. And, musicians don't give such strict deadlines!

5. Coca-Cola's operation in New Orleans just went through a reduction in force. Relocating someone from Germany is unlikely.

   Further, Coca-Cola New Orleans has never heard of your fiance.

6. You made this arrangement and sent the money without asking me first.

7. You can just as easily send the band the money from Germany as I can from the U.S.

8. You claim you don't speak French, but the first number you called me from has a French country code

9. And this is my favorite one — the second number you called me from has a Benin Republic country code.

I then reminded her that my contract clearly states that all vendors will be paid directly by the client.

Oddly enough, I have not heard back from her.

SCAM-STOPPER SMARTS

What I've learned from this experience is this:

1. The only safe way to accept payment from overseas is by credit card. All other forms of payment can be forged or fraudulent and have no backup plan.

2. Get a second opinion. One bank that I spoke with advised me to accept a wire transfer from the client because the money would have to be in the sender's account for the transfer to take place. However, a second banker let me know that to do that would mean giving out my bank account number and routing number, giving the criminal total access to my account.

3. Don't believe that the details make it legit. These scammers are good at the little details. She sent me a photo of her and her fiance, gave me background on their relationship right down to the names of their dogs, and told me exactly which flowers and colors she wanted included in the decor. She was not, however, attentive to what would seem the more obvious details, such as the traceable phone number and the fake check from an American bank. Why do you need me to send U.S. funds if you have access to an American financial institution?

4. The FBI is not interested in preventing crime as much as catching criminals. I was told by the agency that giving them the information on the people who were trying to scam me was not going to do any good. They don't have the manpower to investigate every claim but could only try to help those who had already been scammed and lost money.

5. Father really does know best.

Carolyn Arthurs is owner and senior designer of All About Events, offering a broad range of social and corporate event planning services. After being displaced from her New Orleans headquarters and hometown by Hurricane Katrina in 2005, Arthurs opened an office in Los Angeles and now operates out of both locations. Her company's Web site is www.allaboutevents.net.