Have you ever heard stories about someone emptying their savings to buy Apple gift cards because their bank told them to? It’s not an urban legend designed to scare you into cybersecurity; it’s a real-life example of bank fraud.
Unfortunately, cases of bank fraud surged during the pandemic, with scammers exploiting people’s fears and new-found free time under lockdown. Although these restrictions are now gone, the threat of bank fraud remains.
- 1 What is Bank Fraud?
- 2 What are the Biggest Red Flags of Bank Fraud?
- 3 Red Flag #1: They Ask for Financial Details in a Call, Email, or Text
- 4 Red Flag #2: They Use Aggressive or Threatening Language
- 5 Red Flag #3: They Want You to Move Your Money to a “Safe Account”
What is Bank Fraud?
Bank fraud is a combination of phishing and impersonation scams. A criminal will pretend to be a well-known and trusted financial name and use their reputation to trick or intimidate you into sharing private information.
These scammers may impersonate someone from your bank, online loan company, or investment broker. Basically, they’re willing to masquerade as any organization with perceived authority. It may not even be a financial institution with which you hold an account.
Bank fraudsters may call or try to hook you with a phishing email or text. Regardless of their method, they’ll ask you to do something that no legitimate bank, online loan company, or broker would ever ask.
Understanding what makes up a legitimate financial institution can help you steer clear of these scams. Go online and type these kinds of questions into your favorite search engine: what are legitimate online loans? What can a bank ask me to do? What are my financial rights?
The Consumer Financial Protection Bureau (CFPB) is a good source of reliable information you can trust. They even have a whole section devoted to fraud and scams. Explore their site to become informed.
What are the Biggest Red Flags of Bank Fraud?
Knowing what bank fraud looks and sounds like can help you avoid ever falling for these scams. To kickstart your education, here are a quick list of red flags.
Red Flag #1: They Ask for Financial Details in a Call, Email, or Text
Legitimate financial institutions will eventually need your financial information to open an account or assess your creditworthiness for an online loan. But these requests come at specific times, usually in person at a brick-and-mortar location or on a verified and secured website.
No legitimate financial institution will ever ask you to share your bank account number, password, or social security number on the phone, in the body of an email, or over text.
Red Flag #2: They Use Aggressive or Threatening Language
Another red flag is how your bank communicates with you. Legitimate financial institutions have dedicated customer service agents who deliver information in a courteous and timely manner.
Scammers, on the other hand, don’t share the same scruples. They might be verbally abusive to intimidate you into action.
Red Flag #3: They Want You to Move Your Money to a “Safe Account”
The last red flag today trips up many people because it seems like the bank is acting in your best interest. They’ll call or email saying your account is at risk, and you need to transfer funds to protect your money.
In reality, a financial institution has the power to freeze your account if they suspect fraud is happening, so there’s never a reason to move money around like this.
If you encounter any of this behavior from a supposed bank or online loan lender, it’s time to ring the alarm. Get in touch with the CFPB and the Federal Trade Commission (FTC) to lodge a complaint and reach out to the financial institution the scammer is attempting to impersonate.