Banking & Finance In Depth

Banking & Finance Scam Statistics 2020 USA


393k credit card fraud reports
564k total banking & credit related reports

$1,566 loss median reported loss (investment scams)

Source: 2019-20 Consumer Sentinel Report

Sections on this page
  1. Common Finance and Banking Scams
  2. How to Beat Banking Scams

Finance and banking scams are designed to deceive people into giving over sensitive banking information like PINs and credit card information or even facilitating remote access to your home computer to access your online banking via saved passwords.

Many scams are designed to steal money, making banks and financial institutions the primary end target. However, banking scams can often be part of broader schemes like identity theft, brand or government impersonation, or even "tech support" scams.

Common Finance and Banking Scams

Some of the most common banking and finance fraud events involve credit cards, debit cards, and mortgage payments.

Credit Card Scams

Credit cards are used as the primary transaction tool for online shopping and most in-store transactions. Most people will be familiar with the experience of lost, stolen, or compromised credit cards. Many stolen credit card numbers are for sale on the dark web. 

Credit card details are vulnerable in many ways:

  • Skimmers: Credit card skimming devices can be installed on existing ATMs and credit card payment systems like those used at the gas station. These devices skim the secure credit card information from the magnetic stripe found on the back of the card. Falling victim to a credit card skimming device is particularly confronting since it happened right before you. 
  • Careless security: Many credit cards are compromised due to carelessness. This can include not physically being with your card during events like leaving credit cards in cars when valeted or leaving cards in garments at the coat check. 
  • Observational weakness: Many people use cafes and libraries to do their online day-to-day laptop sessions and daily tasks. This is a criminal's playground. For example, reading the credit card number out when paying by phone in a cafe is very vulnerable to being overheard. Or, with a small camera, a customer's card can be filmed when handing it to a cashier or restaurant staff.
  • Website hacks and data dumps: Many websites and businesses store our credit card details to make our recurring transactions and direct debits easier. This includes the biggest brands in the country, all the way down to small mom-and-pop stores. Unfortunately, hackers go after businesses and stored financial information to get large batches of cards in one hit. 
  • Bad vendors: Some e-commerce sites are set up in foreign countries with great deals to encourage you to purchase a cheap item but actually scrape, steal, and re-use the credit card 

Mortgages

Home loans and mortgages are the largest single transaction that a customer will perform with the bank. As such, they provide an opportunity for scammers to try and intercept communications and get the settlement funds diverted to their own "escrow" accounts. 

Fake escrow website.
Scammers also set up fake escrow sites to trick you into depositing money into their accounts.

Savings Accounts & Debit Cards

Debit cards that are linked to savings accounts pose a massive financial risk. For example, if you only have a single savings account and use a debit card for transactions with this account, the loss or compromise of a debit card (in the same way that credit cards are compromised) can expose your entire savings. 

Bank Fraud

Direct attempts to defraud banks are widespread and mainly involve loans for things that don't exist, loans for items that have been overvalued, or loans for things that other banks have already loaned money for. 

There are many sophisticated and terrifying techniques that people use to defraud banks. Examples include a couple featured on American Greed, whose plan was to use multiple banks to finance mortgages of the same value on the same property at the same timeā€”all without any of the banks knowing each other's financing agreements.

Over $50 million in loans was stolen from local banks. 

Many people who are involved in this type of fraud live by John Paul Getty's maxim:

John Paul Getty

If you owe the bank $100 that's your problem. If you owe the bank $100 million, that's the bank's problem.

Overpayment & Refund Banking Scams 

Scammers often use the overpayment technique in online transactions on auction websites where they act as a purchaser to send a check for more than the agreed sale price. They wait for you to notify them of the error, and they ask for a quick return of the overpayment.

Overpayment scams.

When you cash their check, the bank will take a few days and realize their check is fake or canceled, but you have already sent the money. 

How to Beat Banking Scams

It's almost impossible to avoid being the target of an invoice or banking scam, but there are certainly best practices you can follow to keep your money safe.

Some Payment Methods Offer More Protection Than Others

Using credit cards, PayPal, and some other payment methods offer pretty good protection against scams and fraudulent activity. Most requests for payment via wire transfer, such as MoneyGram or Western Union, should be met with caution. 

Safety Tips: Stay Safe From Banking Scams

  • Keep your credit and debit card information secure:
    • Don't save your credit card information online.
    • Cover your PIN when entering it at ATMs or POS machines.
    • Don't ever give your card information to anyone you don't know.
  • Monitor your bank statements regularly and report any unauthorized activity or charges.
  • Check for card skimmers, especially at gas stations.
  • Avoid using public WiFi when accessing your bank and credit card accounts. If you need to, use a virtual private network (VPN) when using public WiFi.
  • Look for signs of scams when receiving emails, phone calls, texts, and mail from your bank or financial institution. 
  • Report lost credit/debit cards immediately and dispute any unauthorized charges. 
  • Don't give anyone your sensitive information, such as your bank PIN or login credentials.
  • Verify that websites are legitimate before entering your information.
  • Be wary when sending payment via untraceable methods, such as money transfer. Only pay for items/services when you have already received them. 
  • Don't trust buyers who overpay you for your items for sale, especially when they request a refund for the overpaid amount.
  • Always wait until checks have cleared before sending items you're selling. 

Scams Relating to Banking & Finance

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Navy Federal Scam Text: What to Know to Avoid Identity Theft
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Navy Federal Scam Text: What to Know to Avoid Identity Theft

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Wells Fargo Text Alert - Is It A Scam?

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Capital One Fraud Text Alert Scams: Spotting a Fraud
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Capital One Fraud Text Alert Scams: Spotting a Fraud

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Don't Fall for This U.S. Bank Text Scam Re: Locked Account
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PayPal Text Scam: Identify a Fake & Protect Your Money
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PayPal Text Scam: Identify a Fake & Protect Your Money

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Citizens Bank Text: Scam or Real Message?
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Citizens Bank Text: Scam or Real Message?

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Amex Fraud Text Alert Scams: Spotting a Fraud
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Amex Fraud Text Alert Scams: Spotting a Fraud

If you receive a text message from American Express, don't click on any links or call the phone number listed—it could be a scam designed to steal your information and money.

Real Chase Fraud Text Alert or Scam Message?
9 May 2022 |

Real Chase Fraud Text Alert or Scam Message?

If you receive a text message from Chase Bank, don't click on any links or call the phone number listed—it could be a scam designed to steal your information and money.

Fake Escrow: Craigslist Users Beware of This Common Scam

Fake Escrow: Craigslist Users Beware of This Common Scam

Escrow services are supposed to keep your money safe, but in this Craigslist scam, these escrow sites will do more damage than good.

Citibank Text Message Scam: Locked Debit Card Alert Is Fake

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Guides Relating to Banking & Finance

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How to Protect Yourself from Fake Bank Text Messages
9 May 2022 |

How to Protect Yourself from Fake Bank Text Messages

Learn how to spot the difference between a genuine and fake bank text and protect yourself from fraud.

15 Ways to Protect Your Bank Account from Scammers

15 Ways to Protect Your Bank Account from Scammers

Keeping your bank account and money secure isn't as simple as keeping your PIN a secret. Hackers and scammers find numerous ways to gain access to your funds.

How Alliant Credit Union Protects You From Scams

How Alliant Credit Union Protects You From Scams

Alliant Credit Union has several security protocols in place to help protect you from fraud and scams, including ways to recover lost funds or limit your losses.

Hidden Tinder Swindler Red Flags - 6 Dead Giveaways (Did You Catch Them?)

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There were tell-tale red flags of a scam all the way through the Netflix documentary, which could have helped the victims identify him as a scammer. Learn from these markers to avoid being a victim.

Navy Federal Fraud Protection: Keeping Your Money Safe
10 January 2022 |

Navy Federal Fraud Protection: Keeping Your Money Safe

As a Navy Federal Credit Union customer, you're protected from hackers, imposters, and credit card fraud.

News Relating to Banking & Finance

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$3.38 Million Lost in Squid Game Cryptocurrency Scam
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$3.38 Million Lost in Squid Game Cryptocurrency Scam

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Social Media: The New Favorite Amongst Scammers
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Social media platforms are possibly the most used tools in committing fraud, responsible for $770 million in losses.

Beware When Scanning QR Codes, Even for Menus
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The FBI is warning Americans about a new scam circulating in the country involving fraudulent QR codes in public places.

$30M Worth in Counterfeit Goods Seized in Los Angeles
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Fake Gucci, Chanel, and Louis Vuitton handbags and clothing were just some of the items found in a large shipment of counterfeit goods coming in from China.