Most common banking scams

 

My daughter will be a teenager soon and I received an email from Fidelity with an offer to open a youth account for her. 

Sure, it is good to learn financial basics starting earlier than later. Especially the traps and pitfalls like banking scams should be learned first. It reminds me of my first trip to Germany when my German was almost non-existent. Before my trip I bought a book of "German Swear Words and Bad Language" and learned that first. I thought as long as I don't hear anything of that bad language spoken to me, I will be fine, even if I don't understand much. 

This post is specifically about the recent most common banking scams. Reading this post will be my girl's first "homework" related to her new bank account. 

1. Phishing

Scammers send convincing-looking emails, text or phone calls that appear to be from a bank or financial institution, asking the recipient to click on a link or provide personal information, such as account numbers, passwords, or Social Security numbers. 

Never click on links or open attachments from unknown senders, and be vary of urgent or threatening messages. Always check the sender's email address or phone number. Don't trust the phone number, they can be faked. Best is to get the original customer care phone number for the secure legitimate bank web site and call them directly to check if there is any issue. Don't use links of phone numbers ion the suspicious email or text. In case of a phone call, hang up and call the official number. 

2. Account Take Over

Scammers gain access to a victim's bank account by stealing login credentials or using malware to obtain access. They make unauthorized transactions or changes the account information. 

To prevent account take over, use strong, unique passwords and enable multi-factor authentication if possible. Regularly monitor the accounts and immediately report suspicious activity. 

3. Card Skimming

Skimmers are small devises illegally installed on ATMs or point-of-sale terminals (like gas station or self-check-out station at a store). They very small and not very noticeable. During use they steal credit or debit card information. 

To avoid skimming, be cautious of ATMs that  look suspicious or have loose parts. Always cover the keypad when entering the PIN. Check bank balances regularly. 

4. Fake Checks

Scammers will send fake checks, asking to deposit the check. They may say that the amount on the check was too large, by mistake, and they "may get in trouble with their boss" and ask you to wire part of the money back to them. The wired money is transferred fast out of the account and a few days later the fraudulent check bounces.  

Scammers may also claim that you've overpaid, won a price or they "hire" you as a mystery shopper.  

In most cases you are liable for the money received from a fake check. If you spend it before the check clears the bank will get it back from you. Your account can be flagged for suspicious activity and even frozen. 

To avoid, make sure the check is from a legitimate source. No one will send you a check just like that, with no reason.  If you have the suspicions, let the bank know and wait for 30 days to have the check cleared definitely. 

5. Charity Scams

Scammers will contact you and ask for donations to a charity that doesn't exist. They may also ask you to provide your personal information, such as your bank account number or credit card number, so they can make a donation on your behalf. 

Don't donate to charities that you're not familiar with. Instead, go directly to the charity's website if you want to make a donation.

6. Imposter Scams

Scammers will call you and pretend to be from your bank, the IRS, or another government agency. They'll ask you for personal information, such as your Social Security number or bank account number, to "verify" your identity. 

Don't give out any personal information to someone who calls you unexpectedly. Instead, hang up and call the company or agency directly to verify the call.

7. Lottery and Sweepstakes Scams 

Scammers will contact you and tell you that you've won a lottery or sweepstakes. They'll ask you to pay a fee to claim your prize, but the fee is just a way for the scammer to get your money. 

Don't pay any fees to claim a prize that you've won. Instead, contact the lottery or sweepstakes company directly to verify that you've won.