You work hard to secure your financial success. Financial institutions work hard to protect your assets, your personal information, and their reputation as being secure. But fraudsters and thieves are always working on new schemes and tactics to get to your hard earned cash.
Bank fraud is obtaining or attempting to obtain money or assets in the care of a financial institution through fraud. It’s a federal crime and can land a person in prison for up to thirty years. 18 U.S.C. § 1344
Banking has evolved due to technological advances and consumer demand for convenience. Unfortunately, this environment only made thieves more sophisticated and has created many subsets of this crime. These are the common types of bank fraud:
Most bank fraud activity involves some element of identity fraud, which is the illicit use of another person’s personal information. Typically, this begins with identity theft, where personal information is wrongfully obtained or stolen. Florida recognizes this and has a comprehensive law to cover all criminal use of personal identification information. According to the FBI, “criminals can get the information they need to assume your identity from a variety of sources.” Here are just a few:
• Asking Nicely: An identity thief may try to get personal information through a phone call by faking an acquaintance or business encounter. If they’re bold enough they may even ask in person, but these aren’t the only ways.
• Dumpster Diving: Identity thieves are not afraid to get a little dirty looking through the trash for social security numbers, bank account numbers, and any other details that can get them closer to cash.
• Shoulder Surfing: If they’re shy, identity thieves may resort to watching from a distance when someone enters their account number, pin, or password. Eavesdropping is also a classic move to obtain financial details.
Once the personal information is obtained, any manner of financial fraud may occur. It may be used to open new bank accounts, loans, and credit cards. They may attempt an account takeover, where they assume the identity of the account holder. This way, they make transactions and appear to the bank as if they are the right person.
The internet facilitates many financial transactions—shopping, banking, investing—so of course, it is a playground for bank fraud. Internet fraud involves using software, internet services, or internet access to steal personal and financial information or take advantage of people.
• Spam/Emails: It’s not just a Nigerian prince asking for help anymore. Fraudsters use social engineering to manipulate people into handing over personal and sensitive details. They’ll crawl your social media to find out what and who you care about to make the request appear legitimate.
• Phishing: Fraudsters may send a link through email, text, or voicemail leading to a fake website designed to nab personal information. The website may have the appearance of a real bank and ask for passwords, credit card numbers, and personal information.
• Malware/Scareware/Ransomware: This involves the use of viruses to take over or damage computer systems with the (false) promise of restoration after payment. It may even involve holding personal or business data hostage while demanding an account number or payment (usually in Bitcoin).
Most people have more cards than cash in their wallets, but that doesn’t make them less vulnerable to theft. These crimes are prosecuted under 18 U.S.C. 1029, 15 U.S.C. 1644 and in Florida 817.568 and can carry penalties of $10,000 or imprisonment for up to ten years.
• Skimming: This happens when the magnetic strip of the card is copied and duplicated after being swiped for a legitimate transaction. Then, the thief can parade around town as the card holder, making purchases online, or in person.
• Account Takeover: Ever lost your credit card? Needed to change your address? Fraudsters can call the financial institution, pretending to be an account holder, and hijack the account by asking those very questions.
• Check your accounts for transactions you didn’t make
• Change your passwords frequently
• Shred documents with personal identifying information
Always report suspicious activity as soon as possible.
• Contact your financial institution. Remember “a bank’s purpose is to make loans and protect depositors’ money.”
• In Florida, Report it to the Attorney General online or call 1-866-966-7226