More than 50,000 people filed scam reports with the Better Business Bureau in 2018, according to the 2018 BBB Scam Tracker Annual Risk Report. While the median loss for these scams was $152, some victims were out thousands of dollars — and that money may never be recouped.
Unlike credit card fraud, where the maximum liability under federal law is $50, there is no such protection for bank scams. “You are responsible for any deposits made to your account,” explains Liz Cackowski a certified financial crimes investigator and corporate fraud manager for the financial firm Bryn Mawr Trust.
Scammers often convince victims to deposit fake checks and forward a portion of the cash to them. By the time the check is discovered to be fraudulent, the scammer has disappeared and the victim is left to cover the cost of the bad check. “The scam part of it is the technique used to get someone to participate in a fraud,” Cackowski says.
That said, you can avoid falling victim to these scams by knowing how criminals operate and how to protect yourself. Watch out for these common scams that target your bank account:
— Check overpayment scams.
— Credit card and bank account scams.
— Charity scams.
— Online lending scams.
— Employment scams.
— Award scams.
Check Overpayment Scams
Check overpayment fraud is a popular scam that targets sellers from online auctions and classified advertisement websites. During a transaction, the fraudulent buyer will pay the seller with a noncash payment for more than the amount of the item. The scammer will then ask the victim to deposit the check and wire the difference back to the buyer. However, the check will ultimately be found to be fake, and the seller will be out not only a returned item fee, but also whatever cash they forwarded to the supposed buyer.
How to avoid this scam: A check that comes from an unknown party should be a red flag, Cackowski says. For instance, if you are selling an item to someone in Ohio, but the check lists the name of a dentist office in the District of Columbia, it’s probably not legitimate. Regardless of how insistent a buyer may be, never cash a check and immediately wire money from it. Talk to your bank if you have any concerns about the legitimacy of a payment you receive.
Credit Card and Bank Account Scams
You may get emails or calls from someone who claims to be from your credit card issuer or bank. The message may ask you to click on a link to update your account information or call back to discuss a problem. In some cases, scammers may even claim they are investigating possible fraud on your account and ask for details such as your account number or Social Security number so they can investigate further. These are all attempts to get you to hand over sensitive information.
How to avoid this scam: Do not click on any email links or attachments. Scam phone messages may include a callback number, but you should ignore that. “Don’t call the number they gave you. Call the number you have,” says Michael Foguth, president and founder of advisory firm Foguth Financial Group in Brighton, Michigan. Otherwise, you could find yourself on the phone with the scammer, rather than an actual bank representative.
Not everyone asking for a charitable donation may be on the up and up. “Fraudsters are out there, and they do prey on people’s good intentions,” says Caleb Barnum, principal solution consultant, payment risk solutions for electronic payments provider ACI Worldwide. For example, you could receive a call asking for donations to the local police department or to military families. The crooks elicit information about your bank account or debit card to make the donation over the phone — giving them full access to your checking account.
How to avoid this scam: To make sure your good intentions don’t go to waste, the safest way to give to a charity is by choosing an organization you know and trust. Be cautious about giving your information to individuals who reach out by telephone or email.
Online Lending Scams
Victims of this scam are often those who have trouble obtaining a loan through a bank. They may receive an email from a supposed lender or find a website offering easy access to money. “Because the victim thinks they are applying for a loan, they don’t think twice about providing sensitive information,” Cackowski says. After obtaining a victim’s bank account, Social Security number and other details, they may actually send a loan payment or direct deposit. The victim may be asked to make an immediate good faith payment out of that money but as with the check overpayment scam, the “loan” is fraudulent.
How to avoid this scam: Always check reviews and the Better Business Bureau rating of any company offering a loan. If there are no reviews or ratings to be found, the business may not be real.
Younger people are more likely to be the victim of employment scams, the Better Business Bureau reports. In most of these scenarios, the crooks offer a job but request a finder’s fee or other payment. Work-at-home jobs seem to be particularly ripe for scams, and fraudsters will try to charge a fee for supplies and information to help a person get one of these positions.
How to avoid this scam: If you are asked to work at home for minimal work and high pay, it’s probably a scam. Do not accept any work-at-home opportunities that involve sending money in advance or sending a portion of payments to a third party via wire transfer.
In these scams, you are typically told you’ve won a foreign lottery. Crooks will send you a very large check to deposit into your personal checking account. You will then be asked to immediately wire a portion of the funds to pay for government taxes and administrative fees.
How to avoid this scam: If you didn’t enter the contest, you didn’t win it. Note that it is illegal to participate in a foreign lottery via mail or phone in the U.S. Additionally, when winning a lottery, you will not be responsible for paying taxes or fees directly to the government.
Scammers will continue to come up with creative ways to get into people’s bank accounts, which often involves victims pulling cash out to hand over to the criminals.
“They go after easy targets,” Barnum says. Scammers often look for people who are searching for jobs, dating, selling products and even do-gooders looking to help someone in need. What’s more, seniors are often in the bull’s-eye for scams. “Unfortunately, that generation tends to be a very trusting generation,” Barnum notes.
Be sure to keep these common scams and tips in mind before you put your funds at risk. Most importantly, “Do not pay something (you didn’t initiate) over the phone,” Foguth says. “Just don’t do it.”
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Update 03/08/19: This article was originally published on January 23, 2015, and has been updated with new information.