Common Types of Banking Fraud

When it comes to cyber fraud, there are plenty of digital ways to protect ourselves, from firewalls to anti-virus.

But the most common types of banking fraud aren’t always perpetuated by skilled computer hackers, but rather by master manipulators. And while the goal is to steal funds from your accounts via online or mobile banking, the target isn’t your computer.

It’s you.

What Are the Most Common Types of Bank Fraud?

Here are some of the most common stories these manipulators will use to gain access to your bank accounts. Watch for the red flags!

The Bank Investigator

You get a call, email, or other message claiming to be with your bank's fraud department, and they want your help.

They claim they're investigating an employee of the bank for stealing, embezzling, or another financial crime. They ask you to complete a transaction, such as sending a Zelle® payment, or perhaps a wire transfer, and they say will help them catch the criminal in the act.

Further, they ask that when you complete this transaction, you don't tell the banker you're working with about the investigation.

Click to see what happens next.

The Job Offer

You’re on the hunt for a great new job. And you feel like you’ve finally found it! You applied online and get a job offer.

As a part of the onboarding process at your new job,  your employer directs you to open an account with a specific bank (perhaps IncredibleBank or another financial institution) because your employer has a relationship with that bank and that’s where you’ll receive your direct deposit for your paycheck.

Instead of asking you for the routing number and account number as what should be requested for a direct deposit,  they instead ask you for your login credentials.

Click to see what happens next.

The Online Friend

You meet someone online, and over the course of nearly a year, you have developed a great friendship. You’ve shared a lot with them, including the college courses you’re taking.

They tell you they want to help you pay for your college expenses – what a great friend!  They ask you to open your account with a specific bank so they can deposit money in your account. Even when you explain you already have an account somewhere else,  they insist you open your account at this specific bank and give a number of reasons why it’s better this way.

You open the account and provide them with your online banking credentials so they can deposit money into your account.

Click to see what happens next.

The Banker Call

You get a phone call, and the caller ID says it’s coming from your bank. The caller tells you he works for the bank and  need you to provide them with your online account credentials, claiming there are potentially fraudulent transactions on your account.

He stays on the line with you and tell you that you may get a code via text and ask you to provide him with that code.

Even though the text message containing the code tells you not to share your code and that your bank will never ask for it, the banker assures you that he sent the code and assures you it’s okay to provide it.

Click to see what happens next.

The Sweetheart Swindle

You meet and start dating someone online. Over the course of several months, your relationship grows stronger, but  every time you try to meet them in person, they have seemingly valid reasons they can’t – including some last-minute cancellations.

To make it up to you, they offer to pay for your flight to go visit them. They ask you to open an account with a specific bank (notice a trend here?) and  ask for your online banking credentials so they can put funds in your account.

You open the account and provide them with your online banking credentials so they can deposit money into your account.

What happens next?

Next, the scammer logs him or herself into your account and sends themselves money using Zelle® or bill pay to steal funds.

He or she may also link external accounts and send in bogus deposits and withdraw the money before the deposit can be returned as fraudulent.

The worst part? You would be on the hook for overdrawn account, because providing online banking credentials to someone else is considered giving them authorization to do transactions on the account. As a result, you may not be covered under consumer protection regulations.

Also note that these are just examples of stories scammers may tell. These fraudsters will use a multitude of stories and techniques to get you to provide them with your online banking credentials so they can steal money.

How Do Fraudsters Contact Me?

Fraudsters use a variety of methods to reach their victims. Here are a few ways they do it:

  • Pop-up window on your computer
  • Phone call
  • Email
  • Text
  • Social media
  • Dating sites
  • Online job sites
This list is far from comprehensive. The point is - fraudsters will use any method they can to get in touch with their next potential victim. No matter how someone reaches out to you, be on the lookout for the red flags.

None of the stories above required any special computer skills. All that was required was some good acting – enough to convince you to give them the information they wanted – your online banking credentials.

The moral? Never provide anyone with your online banking credentials…no matter how convincing their story.

More Ways to Protect Yourself From Fraud Attacks

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