Scams and Guides Relating to: Banking and Financing

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

Common Banking and Finance 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 the majority of in-store transactions. Most people will be familiar with the experience of lost, stolen, or compromised credit cards. Huge volumes of 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 in front of 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. 

Savings Accounts & Debit Cards

Debit cards that are linked to savings accounts pose a massive financial risk. 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 time—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 & Bank Refund 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.

When you go to 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.