May 20, 2005
JSA Warns of Postal Money Order Fraud
The Jewelers' Security Alliance says the U.S. Postal Inspection Service reports 160 arrests have been made in the U.S. since October 2004 in connection with fraudulent U.S. Postal Money Orders. Many good-quality counterfeit U.S. Postal Money Orders are coming from Nigeria, Ghana and Eastern Europe. In most cases, the fraud artists want to use the counterfeit money orders to pay for goods to be shipped, and jewelers make ideal targets, says JSA.
In the last year, many attempts, originating in Nigeria, have been made to have jewelers ship goldusing fraudulent credit card transactions. JSA is aware of at least six cases in which U.S. jewelers shipped and took losses, in one case nearly $100,000 in gold. Attempts to use U.S. Postal Money Orders in these transactions is a new variation on an old crime.
To identify a genuine U.S. Postal Money Order, hold it up to the light and look for a watermark of Benjamin Franklin repeated on the left side, top to bottom. You can also see a dark security thread running top to bottom to the right of the Franklin watermark which shows tiny letters "USPS" along its length. If one or both of these security features is missing, the postal money order is fraudulent.
Also be aware that the maximum value of domestic U.S. Postal Money Orders is $1,000; and $700 for International Postal Money Orders. Any discoloration of the denomination amount indicates there has been an erasure, which is fraudulent.
In the past, the most common crime against jewelers regarding money orders was a fraudulent alteration of the amount using a genuine U. S. Postal Money Order. For example, buying one for $100 and changing it to $1,000. As in those past cases, if a customer requests a jeweler tell them the total amount of a sale to the penny, including the tax, saying that they will return with a postal money order, they may be setting the jeweler up for an altered money order. The difference now is that the entire instrument may be fraudulent and the transaction will likely involve shipping.
To learn more about identifying counterfeit money orders, go to www.usps.com/missingmoneyorders/security.htm.