It’s never been easier for criminals to hack into bank accounts via information leaks or scam calls, messages, or emails. It’s important to know the methods scammers will use so that you can stay ahead and keep your accounts safe from bank scams! Continue reading below to find out more!
Bank scams are a common way for criminals to gain access to people’s personal and financial information. In 2020, the Federal Trade Commission received more than 2.1 million fraud reports from consumers. Scammers use various methods to trick people into giving up sensitive information like bank account numbers and passwords.
Keep reading to learn about eight common bank scams and what you can do to protect yourself.
1. Overpayment Scams
If you provide services or sell products online, you could fall victim to an overpayment scam. Overpayment scams typically begin with someone sending you a counterfeit check or money order for more than the amount owed. Then, they ask you to deposit the money in the bank and wire the difference back to you.
Unfortunately, since the check was fake, you could owe the bank a returned check fee. You’re also out any funds you wired to them and the product if you shipped it.
2. Check-Cashing Scams
Another scam involving checks is the check-cashing scam. This scam preys on the compassion and generosity of other people. An individual approaches you outside of a bank or other financial institution asking if you will cash a check for them. They may mention that they don’t have an account at this particular bank but need the money.
You can deposit the check and pull cash from your account to pay the person their funds. However, the clearing process can take several days. So, when the check doesn’t clear, the funds are held against your account.
3. Unsolicited Check Fraud
Have you ever received a check in the mail that you weren’t expecting? It could look like a rebate check or a refund for overpayment. Inspect the check thoroughly, paying close attention to any fine print on the front or back. There’s a chance that you are entering into a legally binding contract by signing the check and cashing it. Scammers use tactics like this to get you to authorize memberships, loans and other longer-term commitments that could cost you dearly.
Scammers are counting on your blindly accepting the check as free money and cashing it. Be wary of cashing any rebate or refund check you weren’t expecting.
4. Automatic Withdrawal Scams
Automatic withdrawals are a great way to automate your savings, pay bills, and more. Scammers like automatic withdrawals too, but for other reasons.
The way this scam works is that individuals receive a phone call or postcard indicating that they’ve won a prize or qualified for a special offer. The goal is to get you to read off the numbers at the bottom of your personal checks. They often play this off as a way to verify that you qualify for the offer.
Once the scammer has your checking and bank information, they put it on demand draft, which is processed like a check but doesn’t require a signature. Upon receiving the draft, your bank will transfer money from your checking account to pay the scammer. Unless you pay close attention to your daily bank transactions, you may not notice the bank scam until much later.
5. Phishing Scams
With phishing, scammers use texts and emails to trick individuals into giving up personal information. The information they want includes passwords, Social Security numbers, account numbers, and more. Their goal is to access your personal accounts, such as email accounts and bank and other financial accounts.
Phishing scams are popular because of the accessibility of reaching large numbers of people through email and text messages. The FBI reported that Americans lost more than $57 million in phishing scams alone in 2019. Phishing emails and texts often look as if they are sent from trusted companies you may already know. Typically, phishing scams require you to click on a link and complete an action like confirming personal information. The message may even mention suspicious activity on a personal account.
6. Government Imposter Scams
Another common bank scam is when someone pretends to be a government official. You receive a phone call from the imposter claiming you’ve won a prize that requires payment of taxes or fees so they can process it. The scammer may threaten to send you to prison if you don’t pay a supposed outstanding debt. The reality is that you will never receive a call from a federal agency asking for payment of any kind.
Scammers may use a fake federal agency name like the National Sweepstakes Bureau or the names of real agencies, like the Federal Trade Commission (FTC). Either way, it’s a scam because this isn’t a strategy used by federal agencies to collect payments.
7. Charity Scams
Scammers also like to take advantage of people’s kindness by impersonating charities. They call people asking for donations to a charity or cause. Some scammers go so far as disguising the phone number, so it shows up as a local area code on your caller ID.
You can sometimes spot charity scams by the vague claims they make and the lack of tangible ways your donations are used. Scammers also like to use fake names that sound like the names of legitimate charities.
8. Employment Scams
Employment scams are another common way scammers try to gain access to people’s financial accounts. The scammer promises guaranteed work in exchange for an up-front fee. They may also ask for bank account information so they can transfer commission payments to you. This is all a front to get your bank account information, though.
Job scams often come through emails, but scammers also target people by phone and mail. In some cases, job websites may unknowingly approve job postings that turn out to be scams.
How to Protect Yourself (and Your Accounts) From Bank Scams
Scams will likely be around for as long as people continue to fall for them. You can protect yourself and your bank account by following the tips below.
- Don’t cash checks for other people. You may want to help other people, but never cash a check in exchange for cash unless you know the person well.
- Do your homework. Read and inspect everything. Whether it’s an email, text, or arrives in another form, always read the fine print. If an offer looks suspicious or too good to be true, it probably is.
- Don’t share personal information. With the correct information, scammers can access almost every aspect of your life. This includes financial and other accounts, as well as stealing your identity. Never share account numbers, Social Security numbers, credit card numbers, or passwords with anyone—unless you know the person or know it’s a legitimate request.
- Avoid high-pressure sales tactics. Don’t accept sales pitches that pressure you to act quickly without first reviewing the fine print.
- Avoid paying fees. If you’re sent any offers, prizes, or job openings that require an up-front fee, chances are it’s one of these bank scams. The same goes for offers from unverified sources that require bank account information in order to redeem or claim them.
- File a complaint. If you feel you’ve been the victim of bank scams, report it to the proper authorities. Your financial institution should offer a way to file a complaint if you suspect you are the victim of a bank scam. The amount of your financial responsibility may depend on your financial institution’s rules and the type of account in question.
- Use your best judgment. If something doesn’t feel right to you, don’t move forward—whether it’s giving out personal information or clicking on an email link. If you’ve never received a phone call from the FTC before, think about why you would receive one now.
The best way to avoid having your bank account or other personal information compromised is to be proactive in managing who has access to it. The potential scams here, while specific to banking, are only part of the larger world of identity theft. Because your bank accounts are the means by which you access and interact with so many aspects of your financial life, scammers are eager to seize an opportunity to expose any vulnerabilities related to your banking.