Counterfeit Postal Money Orders
Counterfeit postal money orders are not a new scam by any means, but in 2004 the number of cases of postal money order fraud went up substantially due to the avenue of the internet and other technologies. In fact, between October and December of 2004, the authorities prevented approximately 3,700 counterfeited postal orders from being cashed at banks and other financial institutions. And the punishment is not slight either; you can get up to 10 years in jail or pay a $25,000 fine if caught trying to cash a postal money order that is not valid.
The way the internet got involved with counterfeited postal money orders is through online transactions. For instance if you sold an item on the internet and the buyer offered to pay you more for the item as long as he or she can send you a money order rather than pay by credit card, this person has just received your item without actually paying for it. They typically live in foreign countries and claim they cannot pay by credit card for this very reason and they often target private citizens and small Internet retailers in the United States. This can happen with online auctions most often, but it also exists with small retailers who ship the merchandise after receiving the money order and before cashing it or depositing it at their bank.
Luckily, there are several ways to distinguish a counterfeited postal money order from a real postal money order. First of all, it should have a watermark of Benjamin Franklin down the left side of the money order that becomes visible when held under light. A security thread is embedded in postal money order paper that reads "USPS" which face forward and backward. The denominations on the money order will be listed in two different locations, and if they are erased, will discolor around the denomination amounts. If you flip the money order over, there should list a list of warning instructions printed there. U.S. Postal money orders are also printed on crisp, textured paper whereas counterfeited money orders used a different type of paper. Lastly, the maximum amount for U.S. Postal money orders is $1,000 or $700 for international money orders; if your check is for an amount higher than either of these amounts, it is more than likely a counterfeited check.
Because of the fact that the seller did not know the money order was counterfeited, punishment most likely will be a series of questioning by the bank personnel and legal officials to find out exactly how they received the money order. The next steps would be for you to report the person, including their name, address and other details you know about them. More than likely, they did not use real information, but the FBI may still be able to track them down and punish them for this offense. The best way to protect yourself from postal money order fraud is to decline accepting a postal money order as payment, or if you do, look for signs that it is real and true before attempting to cash it.