Don’t fall for these 10 sneaky bank scams

According to the latest data from the Federal Trade Commission, consumers lost $10 billion to fraud in 2023. If you think it won’t happen to you, you’re only making yourself more vulnerable to scammers.

Bank fraud can be difficult to detect, 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 scam

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

check laundering scam

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

Phishing Scam

In a phishing scam, you receive a text message or email from an authentic-looking source, such as your bank or utility company, asking you to update your information. If you share your details, criminals may take over your account. Never click on links in unsolicited messages. Please call your bank’s official customer service hotline to verify the request.

Automated Withdrawal Scam

You receive a surprise message or phone call telling you that you have won. All you need to do is provide your bank account and routing number to receive funds. Once they have this, the scammer can initiate repeated automatic withdrawals, which can cause a lot more disappointment than realizing there’s no prize.

Advance fee scam

The scam requires you to pay a fee upfront and promises you will receive money or services in exchange. In some cases, these scams are easy to detect—think of the classic “Nigerian Prince” scam—but others are more sophisticated.

For example, if you’re struggling with debt, you might be tempted by a company willing to pay to help you get back on track. Don’t let scammers take advantage of your pain. There are many legitimate ways to get out of credit card debt, including contacting a reputable nonprofit debt counseling service.

Fake banking websites and apps

Scammers can easily set up a fake website or app that looks like a real bank to trick you into providing personal information or sending money. Before clicking any link, verify that the URL is indeed that of your bank or credit union. The FDIC’s BankFind is a simple way to check. When installing the mobile banking app on your phone or tablet, make sure to download it directly from the Apple Store or Google Play Store.

Government Impersonation Scam

Government agencies such as the IRS and Social Security Administration typically only contact you by physical mail. If you receive a call or text message from someone claiming to be a government official, do not respond or provide them with any information – even if the communication initially appears to be genuine. Scammers can easily spoof legitimate phone numbers.

job scam

Legitimate job postings will not ask for your banking information or ask you to pay for products and services to get started. Before applying for a job, check the name of the company with the Better Business Bureau to ensure you don’t fall into a trap.

charity fraud

Scammers want to take advantage of your good intentions, especially when a disaster strikes like an earthquake or hurricane. Rather than responding to unsolicited requests for donations, do your own research, find legitimate local organizations, and make sure your money actually goes to charity.

Identify theft

Identity theft comes in many forms, from scammers using your credit card information to go on a spending spree to using your Social Security number to open bank accounts in your name. The best way to protect yourself from identity theft is to check your credit report and account statements regularly and contact your bank immediately if you notice anything suspicious. You can also sign up for identity theft protection services for extra peace of mind.

How to avoid bank account scams

While bank scams can be tricky, you can take some simple steps to avoid them.

• Know the danger signs. 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 disclose your personal information. Make sure your private information, from your account number to your login credentials, remains private. 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 a unique password. Avoid identifying information such as your house number or birthday. And don’t use the same password for multiple websites or apps. A password manager can help you track logins across platforms.
• Enable multi-factor authentication. Scammers may be able to crack your password, but it’s much harder to copy your fingerprints or face. Multi-factor authentication requires this biometric information to access your bank account.
• Avoid using public Wi-Fi networks. Don’t conduct online or mobile banking on an unprotected Wi-Fi network—stick to a secure home network.
• Monitor your bank statements and credit reports. Review your account transactions regularly and pull your credit report throughout the year to spot any suspicious activity.
• Pull your ChexSystems reports. If you’re concerned about someone opening a bank account in your name, get a copy of your ChexSystems Disclosure Report and Consumer Scores Report to look for any negative marks against your name.
• Use identity theft protection services. You’ll pay for the best identity theft protection and monitoring services, but it’s worth it if you sleep better at night.

What to do if you become a victim of bank fraud

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

• Please contact your bank. Contact your bank or credit union immediately to minimize your losses. In most cases, reporting immediately will help you reduce potential liability. Don’t just stop at one account, though. Take a complete inventory of your other financial products, including your credit cards, to make sure those accounts aren’t at risk as well.
• File a complaint. Contact the FTC to file a complaint and obtain a recovery plan.
• File a report with the police. If a scammer thousands of miles away gets your account number, local police can’t do anything, but a police report can prove that fraud occurred and that you tried to stop it. For example, if someone uses your personal or financial information to launder money, reporting can help prove that you were not involved.
• Change your password. Update passwords for all financial accounts, and consider changing passwords for other services, such as email and social media.
• Set fraud and security alerts. In addition to keeping an eye on your credit report, consider setting a fraud alert with all three credit bureaus (Equifax, Experian, and TransUnion) as an extra safeguard. It’s also smart to set up security alerts with ChexSystems, which will automatically notify you of any attempts to open new accounts in your name.