What Are Banking Scams?


A banking scam, simply put, is an effort by an unauthorized person to gain access to your bank account with selfish or malicious intent.

By gaining access to your bank account, these scammers can then perpetuate a host of crimes against you and others, including stealing your money and your identity. 

Protect yourself from monetary and identity theft by learning how to identify and thwart some of the most common banking scams. 

Examples of Common Banking Scams and How They Work

The four most common banking scams are overpayment scams, unsolicited check fraud, automatic withdrawals and phishing scams. The following explores each of these in greater details, including their hallmarks and modus operandi. 

Overpayment Scams

In this scam, the scammer sends you a fake check. They, then, instruct you to deposit it into your bank account and wire them a portion of the amount, saying that you can keep the balance as compensation for performing the service.

Because the check is fake, however, you will end up becoming responsible for paying back the bank the value of the fake check, plus you’ll be out any of your own money that you wired to the sender to fulfill your part of the agreement. 

Unsolicited Check Fraud

In this scam, the scammer sends you a perfectly valid check but for no ostensible purpose.

What the scammer doesn’t want you to realize is that, if you decide to cash or deposit the check, you’re actually authorizing a transaction you were unaware of, such as a purchase of items you didn’t order, securing a loan agreement you neither requested, applied for nor agreed to or joining a subscription-based service. 

Automatic Withdrawals

Here, the scammer establishes automatic debits from your account ostensibly so you can redeem a free trial of an exciting service or collect a valuable prize. 

Phishing Scams

According to the FBI’s Internet Crime Complaint Center, phishing scams were responsible for over $57 million in losses to average Americans in a single year’s span.

With a phishing scam, you receive a request to verify your debit card number, bank account information or other private personal information like your Social Security number, again in order to redeem a prize or a free trial of a service or to receive some other purported benefit or avoid some other threatened repercussion.

The email is designed to look like it came from a company or organization you already know and trust.

If you provide the requested information, however, the recipient can then use it to steal your money and identity.

Red Flags to Look Out For

Banking scams may:

  • Claim they’ve discovered suspicious login attempts or other activity on your bank account.
  • Assert there’s some sort of trouble with your bank account or payment info.
  • Require you to confirm certain personal information.
  • Contain a fake invoice attached.
  • Include a coupon for free items
  • Prompt you to click on a link in order to make a necessary payment or sign a required document.
  • Tell you that you qualify to register or apply for government relief.
  • Contain a generic greeting rather than addressing you personally by name.
  • Threaten that your account is already on hold or frozen due to a problem you must resolve post haste.

Tips on How to Protect Your Information

From Overpayment Scams

Beware anytime someone asks or tells you to wire back to them another recipient a portion of the funds contained in a check you receive.

From Unsolicited Check Fraud

Be suspicious of any free trials or lotteries or sweepstakes that request your bank account number or other personal information so you can redeem a prize, benefit or reward. 

Additionally, anytime you receive an unsolicited check, verify its authenticity with the bank from which it is drawn before taking any action to deposit or cash it.

Be sure only to use the contact information from the given bank or credit union’s official website rather than relying on the accuracy of the contact information for that entity provided on the check itself. 

Never simply trust a check at face value. Scammers go out of their way to make fake checks look authentic.

Never deposit money orders or checks from anyone or any organization you don’t know or with whom you don’t have a relationship. 

From Automatic Withdrawals

As soon as you notice any unauthorized or mistakenly authorized automatic withdrawals occurring from your bank account, contact your bank or credit union immediately to stop future automatic withdrawals to those recipients.

Then, you may be able to fill out an affidavit claiming the withdrawals were fraudulent and unauthorized to try and get those funds or some portion thereof returned to you.

From Phishing Scams

To protect yourself from a phishing scam:

  • Use security software on your computer.
  • Set the security settings in your phone to automatically update.
  • Use multi-factor authentication with all your login accounts.
  • Back up all your data securely on a regular basis.

Summary and Resources

If you ever receive a phishing email or one you are suspicious of being one, forward it to the Federal Trade Commission’s spam center at spam@uce.gov.

If you ever receive a fake check in the mail, report it to the US Postal Inspection Service at 1-877-876-2455 or online at www.uspis.gov/report/

You should also report any counterfeit checks you receive to the Federal Trade Commission (FTC) at www.consumer.ftc.gov.

If you believe you may have fallen prey to any banking scam, report your experience to the Federal Bureau of Investigation (FBI) at www.fbi.gov/scams-and-safety.

121 Financial Credit Union is based in Jacksonville, Florida, and serves members at locations across Northeast Florida. Learn more about safeguarding your information at 121 Financial Credit Union’s Security Center and report any suspicions of fraud to our Contact Center.

in Web & Email Scams
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