Bogus Letter Touts Non-existent Prize and a Worthless Check
Tami Torres or Nina Banister
TALLAHASSEE—Tom Gallagher, Florida's chief financial officer, today warned Floridians to be on the lookout for a bogus letter telling them they've won a contest and urging them to send a check to collect the prize. Florida is among several states whose residents have been targeted by this scheme in recent weeks.
The letter is on forged MAG Mutual Insurance Company stationery and implies the recipient has won $250,000 in a contest. The letter includes a worthless check for about $2,900 to cover "administrative payment and clearance fees" and asks the recipient to deposit the check and then write one of their own for the costs of receiving the non-existent prize.
"We are working with company representatives and other states' law enforcement agencies to track down the perpetrators of this scam," said Gallagher, who oversees the Department of Financial Services' Division of Insurance Fraud, which was initially alerted to the scam in recent days. "We will not tolerate anyone trying to steal our citizens' hard-earned money."
The scam perpetrators seek to receive and cash the recipient's check before they or their bank realizes the check sent with the letter is worthless. So far, only one Floridian has reported receiving the letter. Anyone who gets one of the letters is urged to call the department's Fraud Fighters' hotline at 1-800-378-0445.
Gallagher said this is an advance fee scheme that occurs when the victim pays money to someone promising something of greater value – such as a loan, contract, investment, or gift – and then receives nothing in return.
Gallagher, who also oversees the Bureau of Unclaimed Property, said these schemes may also tout found money or property and ask the consumer to forward a finder's fee; however, too often the "finder" never has the intention or the ability to help the victim.
Florida's unclaimed property laws prohibit the solicitation or acceptance of a fee in advance for notifying or assisting someone with a claim for unclaimed property. Only registered locators can lawfully solicit and receive a fee, and then, can only do so after a claim is approved and paid.
Gallagher offered the following tips on how to avoid such a scam:
• If the offer of an "opportunity" appears too good to be true, it probably is.
• Know with whom you are dealing. If you have not heard of a person or company with whom you intend to do business, learn more about them. Depending on the amount of money that you intend to spend, you may want to visit the business location, check with the Better Business Bureau or consult with your bank, an attorney, or the police.
• Make sure you fully understand any business agreement that you enter into. If the terms are complex, have them reviewed by a competent attorney.
• Be wary of businesses that operate out of post office boxes or mail drops and do not have a street address; be wary of dealing with persons who do not have direct telephone lines and who are never "in" when you call but return your call later.
• Be wary of business deals that require you to sign nondisclosure or noncircumvention agreements that are designed to prevent you from independently verifying the identification of the people with whom you would do business. Con artists often use noncircumvention agreements to threaten their victims with civil suits if they report their losses to law enforcement.
"We urge anyone who may have information about this scheme to call our hotline and report it," Gallagher said. "These schemes often prey on those who can least afford it."
The Department of Financial Services, Division of Insurance Fraud, investigates various forms of fraud in insurance, including health, life, auto, property and workers' compensation insurance. The Fraud Fighters Hotline is 1-800-378-0445. Complaints may also be made via the department's web site at www.fldfs.com.