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How do I Avoid Money Order Scams?

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  • Written By: Malcolm Tatum
  • Edited By: Bronwyn Harris
  • Images By: Pavel Losevsky, Dvortygirl, Konstantin Sutyagin
  • Last Modified Date: 23 August 2016
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While money orders were once considered less susceptible to scams, that is no longer the case. Money order fraud has become increasingly common as a means of stealing money from trusting consumers. Fortunately, there are several ways to protect yourself from money order scams and prevent losing your hard-earned income.

One way to avoid money order scams is to be very particular about the type of money order you accept. In most nations, a money order issued by a government-operated postal system is a safe bet. This is because it is possible to take the instrument to a local post office and have it verified. There are also brand name money orders sold at various retail outlets; banks can often inspect those money orders and determine if they are fakes or legitimate financial instruments. In any case, never accept a money order that is purportedly issued by an entity that you do not recognize.

Another way to avoid money order scams is to never release goods before verifying that a money order is real. For example, if you sell items at an online auction site and accept money orders as payment, make it clear that the item will not be shipped until the money order clears your bank. Most banks place a hold on deposited money orders that may last as long as ten business days. Once your bank has cleared the payment, then you can release the goods to the buyer.

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Money order scams sometimes involve exchanging cash for a fake money order. The easiest way to avoid this type of scam is to simply say no to an immediate exchange. Instead, offer to deposit the money order and then tender cash only after your bank clears the order, usually in ten days or less. Scam artists will readily reject this proposal, since they know the money order is not good and they will ultimately receive nothing for their efforts.

With so many other money transfer options available today, many consumers no longer need to rely on money orders as a means of sending or receiving money. When circumstances do require receipt of a money order, make sure that only name brand domestic or international money orders are accepted, and do not release goods to the buyer until the money order clears. Doing so will help you avoid money order scams in which the fake order is good enough to fool most people, but not good enough to fool the company that supposedly issued the financial instrument.

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