Banks fight surge in high-tech scams

Internet scams and easy access to counterfeiting technology are raising concern about an upswing in fraudulent checks.

"The incidence (of bad checks) in the first quarter of 2006 was 50 percent greater than the first quarter of 2005," said Michael Poch of M&T Bank. "We expect it to continue climbing this quarter and throughout the year."

"Anyone who uses the Internet - any bank's customers who use the Internet - is a potential target," he says.

Scam schemes are many, but the FDIC says the phony international lottery is one of the commonest and is currently the biggest fraud making the rounds.

The FDIC's list of known fraudulent lotteries contains literally hundreds of names - all phony. A few of the legitimate sounding ones include: Canadian Equity Funding; Afro Euro Sweepstakes Lottery; British Columbia Lottery Corp.; English Premier Lottery UK; United States Lottery Commission; and United Stakes Lottery.

If fooled, the victims stand to lose thousands of dollars, and the odds of recovering anything are slim, officials say.

It works by a sender, who is an agent from the supposed lottery organization, tells the victim that they should deposit the check, often for $25,000, into their bank account. Afterward, they are instructed to wire to the sender an amount, commonly for $5,000 or $10,000, as a fee before they can receive their winnings.

Sometime later, the "winner" discovers that the $25,000 check has bounced and they are out the $5,000 they sent.

But the losses could be even higher if they have to cover the fraudulent check or disclosed to the scammers data on their bank account.

Daugherty said the lottery scams came to her attention about six months ago and the number of cases reported has been climbing ever since. KeyBank, M&T and other banks are trying to educate customers about the lottery scams.

"It's not just people in a specific age group that become the victims in these scams. I've had young professionals be targeted and fall for it. But the most likely targets are senior citizens," Daugherty says.