How Do Bank Scams Happen?
The goal of any bank scam is to get access to your bank account. Unfortunately (for scammers), they can’t get access to your account without your help.
Bank scams require that you share personal financial information with a scammer, install malware on your devices, or use unverified checks and other banking material.
Here are some of the common ways a bank scammer will target you:
- Send you fake checks that legally bind you to some action.
- Send a spam email or fake text message that requires you to respond with a log-in code or with a link to download malware.
- Get you to share your credit card number or bank account information on a phishing website.
- Pretend to be a bank representative and ask for your account number over the phone.
- Try to gain remote access to your online banking platform through malware or viruses.
- Buy your banking information on the Dark Web.
Pro tip: Check to see if your account information is available on the Dark Web using Aura’s Dark Web scanner. With just your email address, we can see if your financial information, credit cards, or other account info is available to hackers and scammers.
The good news is that in most cases, you’re in control of what bank scammers can steal. The more you understand how they try to pull off bank scams, the more secure your account information and money will be.
The 10 Most Common Types of Bank Scams
Bank scammers have come up with some truly nefarious ways to get access to your accounts and steal your money. The ten most common scams for stealing your account information and money are:
1. Overpayment scams
Overpayment scams target online vendors and sellers. A scammer will pose as a buyer and send you a check, money order, or proof of payment (from an online payment processor) for more than the purchase price.
Then, they’ll ask you to refund the difference either through an online payment or wire transfer. But the original payment type was fraudulent, meaning you lose both the refunded money and often the cost of the “sold” product.
2. Employment scams
Job-seekers are often targeted by bank scams as they’re used to giving out personal information.
An employment scammer will post a job opportunity and then ask for your ID to verify your identity as part of the hiring process. Once they have your personal information (such as your ID, Social security number, etc.), they can steal your identity and access your bank account.
If you’re on the job hunt, it’s a good idea to set up fraud and credit monitoring to make sure no one is using your credentials for the wrong reasons. Aura will alert you in near-real time of suspicious activity or if your personal information is being used to open new credit accounts.
Job scams can also include recruiters who ask for payment to “secure” your job as well as fake employers sending you a check to clear on their behalf or goods they want you to repackage and send back.
3. Automatic debit scams
Also known as automatic withdrawal scams, these involve unauthorized withdrawals from your bank account — typically checking accounts.
Scammers get access to your bank account numbers through fraudulent telemarketer calls or by stealing them from unsecured websites when you sign up for a free trial. Once a scammer has access to your account information, they can debit your account every month with your knowledge or approval.
4. Fake check cashing scams
Bank scams often prey on your kind nature. During a fake check-cashing scam, a fraudster will wait outside the bank or another financial institution and ask you to help them cash a check. They’ll tell you they forgot their ID or don’t have an account but need the money right away.
But it’s only after you deposit the check and hand over the money that you find out it was a bad check. When it doesn’t clear, the funds are taken from your account.
Fake check cashing scams are running rampant online as well, especially on platforms like Venmo.
5. Unsolicited check fraud
With unsolicited check fraud, you get a check you did not ask for in the mail — often for a rebate or refund on overpayments. But rather than free money, these checks include fine print that legally binds you to a loan, membership, or other costly long-term commitment.
6. Government impostor scams
Americans recorded 1.8 million complaints about robocalls in FY 2022 [*]. And a large number of them are scammers pretending to be from a government or law enforcement agency like Medicare, the FBI, or the IRS.
During these calls (or emails or texts), the imposter will threaten you with jail time for outstanding debts that require you to pay with a gift card. Or, they might claim you’ve won a prize that requires payment of taxes or fees before they can process it.
Either way, the scammers either get money or your personal information they can use for other types of financial fraud. For examples of other government imposter scams, browse usa.gov.
Remember, the government and your bank will never ask for personal information in an email or text. If you’re unsure, hang up and call back on the official agency phone number.
⛳️ Related: What Can a Scammer Do With Your Medicare Number? →
7. Phishing scams
Phishing scams are a type of social engineering attack in which you receive an email or text that looks like it’s from a popular service provider like Apple or your bank. The message might tell you that someone signed into your account and that you need to reset your password.
Unfortunately, when you click the link provided, you’ll end up sharing your personal information with scammers or downloading malware onto your device (which can allow them to hack your email).
Phishing scams also happen via text and even through phone calls, but phishing emails are most common. In fact, advance fee fraud scams launched via
email increased by 1,000% in Q3 of 2022 [*].
Be extra diligent when responding to official-looking emails. Again, if you’re unsure, contact the company directly and ask if the request is legitimate.
8. Charity scams
Some scammers pretend to run a reputable charity (such as a veterans charity) and may call or email you for a donation. Many of them may go as far as to request personal information or banking details, such as your debit card number, granting them full access to your account.
9. Online lending scams
If you’re in a fix and can’t get a loan from your bank, you may be tempted to try an online lender. But many of these services are really just trying to scam you online.
Bank scammers will set up fake websites designed to commit loan fraud or email you with a “special offer”. When you apply, they’ll ask for sensitive information like bank details or Social Security numbers.
Once they have access to this information, they can open real loans in your name or provide you with a false loan and request payment right away. Only after you pay do you realize the loan was fraudulent.
10. Sweepstakes and lottery scams
Emails claiming you’ve won the lottery, some sweepstakes, a sum of money, or other prizes can be exciting. But be on high alert if they demand you share sensitive information or send money to the organizers. In many cases, if it sounds too good to be true, it probably is.
How to Protect Yourself Against Bank Scams
Financial monitoring and alerts are the first line of defense when it comes to bank scams. The sooner you can spot someone trying to access your accounts, the faster you’ll be able to shut them out.
But there are other proactive ways you can protect yourself from financial fraud. Here are some of the best bank fraud prevention tips you can follow:
- Do not cash any checks paying in excess. Instead, return them to the sender.
- Use only reputable job boards when job hunting and verify the position directly before sending personal information.
- If a job offer sounds suspicious, research the company and look up the recruiter’s reviews before applying.
- Never pay money to get hired.
- Use only encrypted websites when entering your debit or credit card details. Look for “https://” before the URL (not “http://”) and a locked padlock in the left corner of the address bar.
- Never share sensitive information over the phone, unless it’s with a trusted friend or family member.
- Select charity websites carefully. Choose charities you know and trust.
- Double check email addresses by tapping on the sender to view the full email address before clicking on links. Fraudsters can mask their real email addresses, showing only a designated brand name.
- Don’t engage scammers on the phone, even if they have government agency names as their caller ID.
- Government agencies will never call to ask you for sensitive information. When in doubt, call approved customer care or agency phone numbers to confirm.
- Never pay to redeem prizes.
- Only borrow money from banks and certified lenders.
- Double check unsolicited checks with your bank before cashing.
- Never cash a check for anyone, no matter what reasons they give you.
- Use a proven cyber security app, like Aura, to protect your identity and financial information from emerging cyber threats. If you do get scammed, Aura offers $1 million in coverage for eligible losses due to identity theft.
⛳️ Related: Do Banks Refund Scammed Money? →
Who Do Bank Scammers Typically Target?
Unfortunately, no one is truly safe from becoming the target of a bank scam. But in most cases, bank scams target groups who are less experienced or tech savvy – such as young people who have just opened a bank account and the elderly.
For example, people in their 20s are more than twice as likely as older adults to fall victim to fake check scams, according to the FTC [*]. Regardless, anyone who isn’t careful or aware of common tactics can fall for one.
Can Someone Use My Identity To Commit Bank Fraud?
Yes, this is possible. Identity theft was the number one reported type of fraud in 2020 [*], according to the FTC. When scammers gain access to your personal information by phishing, for example, they can do one or more of the following:
- Gain access to your bank account and spend or transfer all your money
- Create new bank accounts in your name and take out several loans on your behalf
- Spend your money on a shopping spree
- Access your government benefits, such as unemployment benefits
Scammers might also access your emails and social media accounts. Then, they’ll contact your friends and loved ones and try to carry out bank scams on them as well, capitalizing on their trust in you.
Were You the Victim of a Bank Scam?
If you're the victim of a bank scam, it’s crucial that you act as soon as possible.
Banks and other insurance policies typically only cover financial fraud if you report it within a short timeframe. Wait too long and you might be on the hook for money you legitimately lost.
Take the following actions, as soon as you discover you’ve fallen victim to a bank scam:
- If you unknowingly granted the scammer access to your credit card information. Call your card issuer and alert them that your credit card numbers were stolen. They'll cancel the card hopefully before the scammer uses it or withdraws any funds.
- If the scammer has already withdrawn funds using your card information. Report the transaction as fraudulent to your credit card company and file an identity theft claim with the FTC. The card company may be able to reverse the transaction.
- If you paid the scammer yourself using a wire transfer, check, debit or credit card. You can also report the credit card scam or transaction as fraudulent to your bank.
- If you paid the scammer using a gift card. Call the gift card company and report the transaction as fraudulent.
- If you send the scammer funds using a payment app or cryptocurrency. Report the transaction as fraudulent by calling the app’s customer service department.
- If you sent money by the U.S. Postal service. Call the U.S. Postal Inspection Service to intercept the package at 877-876-2455.
- If you shared sensitive information such as passwords. Change your passwords right away and check to see if other accounts have been compromised and shared on the Dark Web.
Need more help? Follow the fraud victim's checklist for step-by-step instructions on how to recover from fraud.
Bank Scams Are Avoidable. Aura Can Help
Whenever someone asks for your financial information, question whether they’re legitimate and why they would need it. In most cases, that’s enough to deter a would-be scammer from further targeting you.
Here’s what you can do to protect yourself from bank scams:
- Secure your online bank account with a strong password and 2FA. Hackers often target your online bank account credentials through phishing emails and fake websites. Secure your account with a unique password and two-factor authentication. For extra security, use a password manager to securely store your passwords and warn you if you’re entering them on a phishing website.
- Regularly check your credit report and bank statements. If scammers gain access to your bank account, they’ll often start small to evade detection. Be on the lookout for the warning signs of identity theft — such as strange charges on your bank statement or accounts you don’t recognize. An identity theft protection service like Aura can monitor your credit and statements for you and alert you to any signs of fraud your bank might miss.
- Consider signing up for identity theft protection. Aura’s top-rated identity theft protection monitors all of your most sensitive personal information, online accounts, and finances for signs of fraud. If a scammer tries to access your accounts or finances, Aura can help you take action before it’s too late. Try Aura’s 14-day free trial for immediate protection while you’re most vulnerable.