In the age of dirt cheap technology, especially the graphic capabilities of relatively sophisticated computers and the high quality of color printers, counterfeiting and forgery are exploding worldwide. The severe impact of exploding incidents of counterfeiting is becoming unavoidable.

The Federal Deposit Insurance Corporation (FDIC) is the government agency that has direct oversight of banking institutions.    www.fdic.gov/news/news/SpecialAlert/2005/index.html is a list of reported counterfeiting incidents. At first glance the list is not particularly startling until a closer look reveals the extent of the reports, especially the geographic dispersion of the incidents. From Fargo, North Dakota, to Aberdeen, Washington, to Honolulu, Hawaii to Brooklyn New York, to Orlando, Florida, to Richardson, Texas, banks big and small and north to south have been targeted.

Anecdotal and documented evidence suggests a serious problem with counterfeited financial instruments, including money orders, cashiers checks and checks. Especially singled out are USPS postal money orders. The two local banking institutions stated unequivocally that both institutions are close to making the decision to refuse to accept postal money orders because of the widespread and increasing incidence of counterfeit money orders being presented for payment.

Yet the USPS website contains an article touting the security of Postal Money orders, stating “Postal money orders are as secure, if not more so, than any other financial instrument.” (www.usps.com/postalinspectors/moalert.htm)

So what is the truth of the matter? If you use the link provided on the USPS site to access an April 2005 article in the New York Times, the following paragraph jumps out at you:

“In the last six months, the F.B.I. and postal inspectors say, international forgers — mostly in Nigeria, but also in Ghana and Eastern Europe — appear to have turned new attention to the United States postal money order. More than 3,700 counterfeit postal money orders were intercepted from October to December, exceeding the total for the previous 12 months, according to postal inspectors.”

And the following: “The Federal Deposit Insurance Corporation issued a special alert last month, notifying bank executives of the problem, and Thomas Kelly, a spokesman for J. P. Morgan Chase, said that it had issued a security alert to all its branches regarding the counterfeit postal money orders.”

A side note: you will notice that many of the victims were victimized by perpetrators in Nigeria. Nigeria is the center of the infamous “Nigerian 419 Scam” that has been running literally for decades.

Why is this an issue for all of us? It is in issue for a number of reasons, besides the obvious reason that all losses eventually are paid by the public through higher prices, higher cost of government, and a weakened economic system. If you cannot trust the worth of postal money orders received in payment, if you can’t trust the worth of bank cashiers checks, if you can’t trust the credit card, if you can’t trust the debit card, if you can’t even trust the currency, you simply are unable to do business of any sort. Have we reached that point yet? No. Are we headed in that direction? Yes. Is there anything to be done about it? Yes. But it won’t be easy.

Again, anecdotal evidence shows that a very large component of this type of crime is international in scope. Huge crime rings in Russia, Africa, and Asia have targeted companies doing business on the internet as well as internet users. Amazon has been a target for years, with purchases of high value items on-line with stolen credit and debit card information, using a “distributed” form of fraud, from sources in Russia and Eastern Europe as well as within the US.

There are suggestions and reports that hostile foreign governments are fostering or perhaps even perpetrating financial and electronic crimes on a massive scale. Speculation and “un-sourced” reports name North Korea, China, and other hostile nations as sponsoring internet attacks, attempted security breaches, and attacks on the very financial structures that allow a free market society to operate.

The current state of affairs sees everyday transactions becoming more and more difficult as financial institutions struggle with widespread and growing fraud and counterfeiting. It is now common practice that proceeds from deposit of cashiers checks and money orders will be “frozen for a week before being released, and as mentioned earlier, potential for outright rejection of such instruments.

As is the case in virtually every scam, your best and perhaps only defense is to stay informed, and be a skeptic. If a transaction does not seem right, check it out thoroughly, or better yet, take a pass. Many if not most current scams have an international element, and these almost always ask the victim to do something unusual such as shipping overseas, sending “excess moneys” to an overseas address, and other such activity. Put simply, be careful. It’s a jungle out there. But then you knew that, didn’t you?.