 TITLE: How Does a Money Order Work? CONTENT: How to Avoid Money Order Scams\n------------------------------\nUnfortunately, money orders aren't scam-proof. Be sure you're aware of potential money order scams, especially if you've received a money order from someone you don't know. Most scams involve people sending fake money orders, for instance to pay for an item you're selling or put a deposit on a vacation rental. In a common scam, you may be asked to deposit the money and wire some of it back to the buyer, keeping a portion for yourself.\nThe danger comes when you deposit the fake money order and your financial institution credits your account. Eventually the bank will discover the fraud and reverse your deposit. At that point not only are you out the value of the money order, but you may also be liable for overdraft fees if your account goes negative. If you refunded the scammer any money, you are doubly out of luck.\nAlthough the $50 from Aunt Sue is probably legit, consider these steps to help reduce the chances of fraud if you have doubts about a money order you've received:\n*   **Verify funds.** You can contact Western Union, MoneyGram or the USPS directly to verify funds on a money order. Verification doesn't guarantee a money order is problem-free, but it can help weed out more obvious scams.\n*   **Look for signs of trouble.** Money orders have security features like heat-sensitive stamps, ink that runs when exposed to water or watermarks that are visible when held up to light. If your money order looks fishy—or counterfeit—don't honor it until you're certain it's real.\n*   **Get cash.** If you can, exchange the money order for cash before depositing it into your bank account. It may cost you a few dollars in fees ($4 is typical for a $1,000 money order), but you'll avoid the risk of reversed deposits—and the weeks of wondering whether the money order was legitimate. END