What to do if you receive a counterfeit money order

Counterfeit money orders are fraudulent and should be reported immediately. If the money orders are used for a transaction, the transaction should not be completed. Knowing what to look for and how counterfeit money order scams work is a good start to preventing receipt of counterfeit money orders, but after that time has passed additional measures are necessary.

First, the money order must be identified as counterfeit; section III of this article illustrates how to do that. Following identification of the counterfeit money order, steps should be taken to protect yourself, your money, and your business' money in addition to preventative measures that can help you avoid similar events in the future and/or allow legal action against the fraudulent party.

Steps to take if a money order is identified as fake

The situation of how, where and why a fake money order is received can vary making the process of dealing with the money order different in some cases. For example, if the money order is identified as such during a business transaction the method for dealing with it will be different than if one has received a phony money order through the mail in exchange for a product or service.

Step 1: Don't panic, ask sender for identifiation i.e. driver's license 
Step 2: Record contact and identifying information
Step 3: Stop or cancel the transaction if it's not to late
Step 4: Make a copy of the money order
Step 5: Contact authorities ex. Police or FBI, or Citizen's arrest
Step 6: Inform fraud alert distributors of the crime

Additional fraudulent money order tips

Since money orders vary, the quality and scope of the money order counterfeiting can either be localized, national and in some cases international. There may already be fraud alerts put out for money order counterfeiting so checking these may be of assistance. In all instances, being aware that money order fraud exists and that it can be identified is an important step in prevention of money order fraud victimization.

• Sign up to local and national fraud and scam alert systems
• Do not accept money orders as payment
• Educate yourself on the behavior of fraudsters and scam artists
• Know what physical differences to spot on fake money orders
• React quickly by contacting authorities as soon as possible
• Be willing to press charges and expose those attempting fraud

Identifying counterfeit money orders

Depending on where one is located the types of money orders that may be fake can vary. In the United States several such possibilities exist including counterfeit U.S.P.S. money Orders, 7-11 money orders, Western Union money orders, Credit union, Bank money orders etc. All money orders in the U.S. are not allowed to by issued in an amount higher than $1000.00 and holding a money order under an ultraviolet light may reveal security markings otherwise difficult to see or invisible to the eye. Some fake money order features to look for and/or lack thereof are listed below.

• Faulty or no watermark
• Fake hologram
• Poor ink quality
• Color variation
• No security thread or micro-printing
• Inset fibers may be missing
• Higher than $1000.00 in the United States

Fraud resources links and educational information

The above information was partially sourced from the following resources which may be of additional assistance in preventing, dealing with and counteracting money order counterfeiting.

1. Federal Citizen Scam and Fraud Information Center: http://www.pueblo.gsa.gov/scamsdesc.htm
2. Federal Bureau of Investigation: http://www.fbi.gov/majcases/fraud/fraudschemes.htm
3. New York Times article on Postal money order fraud: https://postalinspectors.uspis.gov/radDocs/consumer/mofeatur.htm
4. E-How article on identifying fake postal money orders: http://www.ehow.com/how_4489385_recognize-fake-money-order.html
5. Postal Money Order Scam Alert by the Texas Attorney General: http://www.oag.state.tx.us/agency/weeklyag/2006/0706counterfeit.pdf