Don’t Fall for These 10 Sneaky Banking Scams

Consumers will lose $10 billion to fraud in 2023, according to the latest data from Federal Trade Commission. And if you think it can’t happen to you, you’re only making yourself more susceptible to scammers.

Bank fraud can be difficult to spot, especially with the rise of online banking. But you can arm yourself with a little knowledge and some precautions. Read on to learn how to spot common bank scams and protect your money.

10 Common Bank Frauds

Check cashing scams

You receive a check asking you to deposit it and return some of the money to the sender. The check may clear, but by the time your bank realizes it’s fake, you’ve already sent real money from your bank account to the scammer. If a potential “employer,” mystery shopping company, or other source asks you to wire money from a check they gave you, tear up the check and ignore the request.

Check laundering scams

Criminals can steal envelopes containing checks from the post office, use chemicals to wash the check, and change the payee or dollar amount. To protect yourself from this scam, use checks with security features, never leave check boxes blank, don’t let mail sit in your mailbox, and write checks with black gel ink—it’s harder to wash.

Phishing scams

IN phishing scam, you receive a text message or email from a source that looks genuine—like your bank or utility company—asking you to update your information. If you share your details, criminals can take over your account. Never click on a link in an unsolicited message. Call your bank’s official customer service line to confirm the request.

Automatic withdrawal scams

You get a surprise text or phone call that you’ve won a prize. All you have to do is provide your bank account and routing number to receive the money. After receiving this, the scammer can initiate a recurring automatic withdrawal, costing you much more than the disappointment of finding out there is no prize.

Advance fee scams

This scam asks you to pay a fee upfront with the promise that you will receive money or services in return. In some cases, these scams are easy to spot – think, the classic “Nigerian Prince” scheme – but others are more complex.

For example, if you’re struggling with debt, you might be tempted by a company that offers to help you get back on track for a fee. Don’t let scammers take advantage of your suffering. There are many legal ways to get rid of credit card debtincluding contact with a reputable non-profit organization debt advisory services.

Fake banking websites and apps

Fraudsters can easily create a fake website or app that looks like a real bank to trick you into providing personal information or sending money. Before clicking on links, verify that the URL is actually your bank or credit union. FDIC BankFind is an easy way to check. When installing on mobile banking application on your phone or tablet, make sure you download it directly from the Apple Store or Google Play Store.

Government fraud

Government agencies such as the IRS and the Social Security Administration will usually only contact you through physical mail. If you receive a phone call or text message from someone claiming to be a government official, do not answer or give them any information – even if the communication seems genuine at first. Scammers can easily spoof legitimate phone numbers.

Work scams

Legitimate job postings won’t ask for your bank information or ask you to pay for products and services to get started. Before you apply for a job, look up the company’s name on the Better Business Bureau to make sure it won’t I fall into a trap.

Charity scams

Scammers want to take advantage of your kindness, especially when a disaster like an earthquake or hurricane strikes. Instead of responding to an unsolicited donation request, do your own research to find a legitimate local organization and make sure your money will actually go to the cause.

Identify the theft

Identity theft comes in many forms, from scammers spending money with your debit card information to using your Social Security number to opening a bank account in your name. The best way to protect yourself from identity theft is to review regularly your credit report and bank statements and contact the bank immediately if you see anything suspicious. You can also register for identity theft protection service for extra peace of mind.

How to avoid bank account fraud

Although bank fraud can be sneaky, there are some simple steps you can take to protect yourself from it.

• Know the red flags. Be wary of unsolicited communications, requests that create a false sense of urgency, and offers that seem too good to be true. If it looks suspicious, it probably is.
• Do not give out your personal information. Keep your personal information private, from your account numbers to your login credentials. This includes shredding any documents containing sensitive information before disposing of them.
• Create strong passwords. Use a combination of letters, numbers, and special characters to create unique passwords. Avoid identifying information such as your house number or date of birth. And don’t use the same password for multiple sites or apps. A password manager can help you track your logins across platforms.
• Enable multi-factor authentication. A fraudster may be able to crack your password, but copying your fingerprint or face is much more difficult. Multi-factor authentication requires these biometrics to access your bank account.
• Avoid public Wi-Fi networks. Don’t do your online or mobile banking on an unsecured Wi-Fi network – stick to your secure home network.
• Monitor your bank statements and credit report. Regularly review your account transaction history and pull your credit report throughout the year to spot suspicious activity.
• Download your ChexSystems reports. If you are concerned that someone may have opened a bank account in your name, get a copy of it ChexSystems Disclosure Report and user evaluation report to look for any negative marks against your name.
• Use an identity theft protection service. You will have to pay for the best identity theft protection and monitoring servicesbut it might be worth it if you sleep better at night.

What to do if you are a victim of bank fraud

If you think you’ve been a victim of bank fraud, follow these tips to limit the damage.

• Contact your bank. Contact your bank or credit union immediately to minimize your losses. In most cases, an immediate report will help you reduce your potential liability. Don’t stop with one account, though. Do a full inventory of your other financial products, including your credit cards, to make sure those accounts aren’t at risk as well.
• I am filing a complaint. Contact the FTC register a complaint and get a recovery plan.
• File a police report. While the local police won’t be able to do much if a fraudster thousands of miles away has your account number, a police report can prove that fraud was committed and you tried to stop it. For example, if someone uses your personal or financial information to launder money, the report can help you prove you weren’t involved.
• Change your passwords. Update your passwords on all your financial accounts and consider changing them for other services, such as email and social media.
• Set up fraud and security alerts. In addition to keeping a closer eye on your credit report, consider setting up fraud alerts at all three credit bureaus — Equifax, Experian and TransUnion — as additional guarantees. It is also wise to set up a security warning with ChexSystemswhich will automatically notify you of any attempt to open new accounts in your name.